Circuit City in trouble, going the way of the dodo?By Julio Franco
After Blockbuster rescinded its $1.3 billion offer for taking over Circuit City last July, things haven't gone anywhere but downhill for the retail chain. Last quarter the company reported losses for $239 million, it has also suffered from the loss of its CEO and a severe impact on its stock price plummeting from a high $9.4 a year ago to $0.43 this week.
With the current financial crisis expected to take its toll on companies that rely heavily on credit or do not have enough liquid assets, Circuit City is one of those retailers expected to collapse by the end of the year.
Without a doubt Circuit City's dramatic decline in market capitalization looks astounding but other tech giants are also suffering from the stock market pain as summarized by a table at TG Daily.
Nvidia, for example, is down 81% from a year ago, Motorola -76%, RIM -60%, and even stock stars from the past few years like Apple and Google are both down 56%. Could consolidation extend to the technology industry, many analysts seem to think so considering the relative bargain some stocks are selling for right now.