Best Buy Co., Inc (NYSE:BBY)’s Schulze to sell stock
Richard Schulze is Best Buy Co., Inc (NYSE:BBY)’s founder and largest stakeholder. He has informed the company that he plans on selling an undisclosed number of its shares to raise money and diversify his assets. Under a pre-arranged plan, Schulze can sell this stock between 1 October and 2014 March at the prices that exist in the market at that point of time. In a security filing, the company said that this will be subject to the minimum price-thresholds and that Schulze will not have any control over the exact timing of this sale.
Hubert Joly took over the Chief Executive officer reins in September 2012. Since then, BBY shares have doubled in value. Through August 3 he chopped annual costs by $390M and matched competitors’ online prices. The company also sold the 50% stake that it had in one smartphone joint-venture with Carphone Warehouse, for approximately $775M. A prominent analyst is noted to have said that Schulze’s net worth has doubled over the last one year. Wedbush Securities’ analyst Michael Pachter has assigned BBY with an “underperform” rating which is effectively a “sell” rating.
A buyout that didn’t happen
Schulze owns around 21% of BBY. A year ago, he had proposed to buyout the company that he has founded for almost $25/share. However he was unsuccessful in finding equity funding and also in lining-up debt by the deadline that had been set for February. Post this, he rejoined the company board in the role of Chairman Emeritus and also nominated 2 directors to the Best Buy board.
The Wednesday session
In Wednesday’s trading session BBY stock rose by 2.26%. The opening price of the shares was $35.06 which reached an intraday high of $36.14 and closed at $35.81. More than 7.2 million shares were traded on Tuesday and the average volume of shares traded over 30 days was 5.72. The company has a market cap of 12.05 billion.