Circuit City
Might as well call it short-Circuit City, baby. Check this out ... the city of circuits is over a barrel with a bunch of its suppliers. They owe big-time dough to some little joes like Hewlett-Packard, Sony, Samsung, Toshiba, Nikon and a half-dozen others.
So what happens? Those guys threaten to play hardball and put the squeeze on CC, withholding their products until they pony up the dough. Circuit City's in a mess, and they had to file Chapter 11 bankruptcy protection just to keep their heads above water during December and not sink with the cement shoes they fit themselves with by using debt.
If they don't have debt, they don't get up to their wall sockets in trouble, jack. Sure, they say they're gonna stay open during the holidays, but companies don't file BK when things are rosy. If they operate with cash, then they'll have more green than a field full of Christmas trees. Learn from it, jack.
So what happens? Those guys threaten to play hardball and put the squeeze on CC, withholding their products until they pony up the dough. Circuit City's in a mess, and they had to file Chapter 11 bankruptcy protection just to keep their heads above water during December and not sink with the cement shoes they fit themselves with by using debt.
If they don't have debt, they don't get up to their wall sockets in trouble, jack. Sure, they say they're gonna stay open during the holidays, but companies don't file BK when things are rosy. If they operate with cash, then they'll have more green than a field full of Christmas trees. Learn from it, jack.











1 Comments:
I knew that CC was done for when they decided to fire all of their higher-paid, experienced employees in order to cut costs 2 years ago. If there ever was a wrong way to cut costs, that has got to be it. Makes me wish I had a trading account to short their stock back then...
Oh well, there's always Best Buy. *evil grin*
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