GameStop Corp. (NYSE:GME) is another toxic takeover stock. There have been rumors circulating around the Internet that Best Buy Co. (NYSE:BBY) would make a buyout offer for the entertainment software retailer since at least 2009. It hasn’t happened, of course, but the timing may be right now. First, GameStop’s shares are up nearly 13% this year and it recently reported record first quarter profits as it continues to invest in the digital business that Best Buy has coveted. Best Buy, meanwhile, is floundering. Its shares are down more than 8% despite the retailer recently hiking its dividend and announcing plans for a $5 billion share repurchase. The company’s fiscal first quarter earnings beat Wall Street expectations were awful, declining 12% while comparable store sales were down 1.7%. Investors’ patience is running thin with Best Buy and may wonder if GameStop will be hurt by shaky consumer confidence. The company’s best hope for growth may be by paying for future growth by purchasing GameStop. It won’t be cheap, and GameStop could be a far cry from the cure BBY needs. But don’t tell execs with itchy fingers that.
5 Stocks That Are Toxic Takeover Targets
No CEO in his right mind should want these stocks
Article printed from InvestorPlace Media, http://investorplace.com/2011/06/toxic-takeover-mso-rimm-gme-nok-siri/.
©2017 InvestorPlace Media, LLC