Not a nice return a complete ripoff for the shareholders. I feel like it has been manipulated down. There are many if not most bought who bought for $50 and now lost half their money on a company with a p/e of 3. The stock was $40 2 years ago, yesterday in terms of equities. The dividend was almost 4%. I like to invest in stocks where 50% (taken by insider debt holder deals 1/2 the time) end up broke and the other 50% quadruple. Tax payers will be completely ripped off, they will put the entire deal on the books as debt.

When you see Romney riding around in a jetski, most of that money came from healthy companies that paid corporate income tax. Corporate income tax - Line 18 Interest Expense. A complete joke of irresponsibility. The guy owns 20%, he could have stayed on with the board.

The big question to ask is "Why doesn't private equity buy the shares on the open market like everyone else?"

Yeah, manipulated down. Or their fundamental business model is under attack on multiple fronts. Probably one of the two!

Shareholder vote in favor of a buyout at $25 would be 99.9999% to steelhouse in favor. Guess everyone else is just stupid!

Anyways, hope your basis is in the low 20's and this goes through so you can bink a 15%return as opposed to what will happen if this buyout doesnt go through.

Hahaha can you imagine how rough it's going to be for BBY if this falls through? It'll be at 15.00 the day that happens.

Think of the epic steelhouse rant if it ever goes private a year later at $10

It's amazing how steelhouse's BBY analysis so perfectly demonstrates what's wrong with his thinking on most subjects. Steelhouse takes the plain numbers (mostly out of context) and extrapolates an income multiplier he things is reasonable (that is absurdly higher than googles atm) and completely ignores the fact that BBY is a company with a slowly growing market share in a rapidly shrinking business.

The first big matchup in electronics was Bestbuy vs Circuit City vs Compusa. Result: Compusa lost the game of musical chairs. The second big matchup was Best Buy vs Circuit City. Result: Circuit City lost the game of musical chairs. The next big matchup is Best Buy vs Walmart vs Amazon and the internet at large.

Walmart doesn't mind being an Amazon showroom because you're going to buy SOMETHING while you're there. Amazon is Amazon. My prediction is the next company to fall is... drumrollll... Best Buy. And everyone who knows anything about retail and business in general agrees with me.

BBY has been manipulated down for over a year now. I hope it goes to 0.05 so I can buy more. all the money of the deal will be immediately put on the books of the company in a dividend recapitization. The corporate income taxes will drop. Thus there will be a bigger deficit next year, all that's to private equity jerkoffs.

Private equity I think has lead to $500 billion in lower revenues to the government. Thus the debt is that much bigger.

Private equity can buy the shares on the open market like everyone else.

11-2010 "Last week, KKR and Bain Capital took a $1.53 billion special dividend from their investment in HCA. Now, they didn't take that dividend from profits. They leveraged up HCA - taking advantage of historically low interest rates - to pull more cash out of the company by way of a dividend recap. The investors already took out $2.25 billion last Spring in a similar maneuver. It now looks like investors will be able to take out more than $400 million more than their initial investment through this dividend recapitalization."

03/09/11 IPO date - so they took out a massive dividend prior to the ipo.


All these banks are going to go bust when interest rates rise.

Assuming there are $9 trillion in debt on the books of corporations at 5% interest. That is $450 billion in interest deductions. Easily $1 trillion (over 10 years) in added revenue if you remove line 18. With companies more secure against bankruptcies. Removing that one deduction (along with charities) would also send all the money overseas home.

I went back to 2006 and 2007 annual reports. HCA increased debt from $9,200 to $28,000. They used some excuse like beds were only 50% filled. They come up with an excuse they can feed to the media outlets hoping the public will buy it. Comparing the balance sheets, the only major change was they added $19 billion in debt. HCA could have save a lot of time by issuing a $42.69 dividend in 2006, and the old shareholders would have owned the company today.

These private equity guys see that BBY has about 5 billion in debt they can add to the company. BBY should cut out the middle man and issue $5 billion in debt and give out a $14.62 dividend. Let private equity raiders build their own company.

HCA's equity holders are very satisfied. Trust me

No one would fund the dividends you propose, so that's problem number 1

I dont get how you think buying shares on the open market would solve the problem. The company has a fiduciary duty to get the best price for the company now and shareholders get to vote on whether to accept, which you don't like because you think every deal needs steeeeeellllllhooooooouse approval.

Instead you want PE guys to be able to just scoop up 50.1% on the open market (hint: they wont be hunting down your 100 shares) What do you do when they scoop up 50.1%, decide to delist the company and you are left with effectively no say in how the company is run and 3-10 years of total illiquidity? Or they dont delist and you are left with a massively leveraged public company (hint: public markets don't like massive leverage)?

Not to tap on the glass to much, but if you actually had money and weren't just playing investopedia fantasy stocks or whatever you should be investing in a diversified porfolio of low-cost, passive funds. Don't ever invest your own money. You don't have the expertise or the aptitude.

Just because you have 50.1% does not give to legal right to take private, you need less than 300 shareholders. In 2006, HCA was taken private for $51. Revenues then were $24.4 billion, today they are $29.6 billion (revenue increases must have slowed). Now they got all these probes in them doing un-necessary heart surgeries. 4 lawsuits were filed in 2006, Shareholders in 2006, got raped and their hair cut off.

They could have kept the company, taken a $42.69 dividend (using the same debt added to the company books after the deal). In the 5 years, they could have collected more dividends and the company would be free for them today. HCA could have also offered a tender offer to all the shareholders that wanted to sell at $51.

BBY should just start taking on all the long term debt they can and start issuing dividends. Exactly what the PE firms do. Just save a lot of legal fees and the money would go to the old shareholders. BBY took on a lot of non-cash charges in 2012, and the have been manipulated down. They are not CC or compusa. They are in virtually every high end mini-mall and earned a record $2.5 billion not including the non-cash charges.

I noticed today, in earnings the only thing mentioned are earnings regarding HCA. People don't care about the debt. But, long term results suffer as debt rises, and I did a check to see if that was true.

You can't fund a $14 dividend to shareholders right now at Best Buy and you couldnt fund a $43 dividend for HCA in 2006. Fact.

Shareholders would also vote for the buyout over your proposal by something like 99%-1% if everyone voted. So, basically, this forum is left to debate whether to believe what the entire financial universe thinks or what steelhouse thinks, and this is a forum that has read your body of work.

EDIT: and remember, in this very thread you tried to convince people that private equity owners actually make their returns through interest paid on debt so...yeah.

Also, stub equity deals have happened. We all remember how awesome things turned out for the Clear Channel and Harman International guys that went the Steelhouse route right? (hint: the guys that didnt take the buyout lit money on fire)

http://www.stikeman.com/cps/rde/xchg...s.xsl/9326.htm

http://www.weil.com/news/pubdetail.aspx?pub=8540

Just because you have 50.1% does not give to legal right to take private, you need less than 300 shareholders. In 2006, HCA was taken private for $51. Revenues then were $24.4 billion, today they are $29.6 billion (revenue increases must have slowed). Now they got all these probes in them doing un-necessary heart surgeries. 4 lawsuits were filed in 2006, Shareholders in 2006, got raped and their hair cut off.

They could have kept the company, taken a $42.69 dividend. In the 5 years, they could have collected more dividends and the company would be free for them today.

BBY should just start taking on all the long term debt they can and start issuing dividends. Exactly what the PE firms do. Just save a lot of legal fees and the money would go to the old shareholders.

I noticed today, in earnings the only thing mentioned are earnings. People don't care about the debt. But, long term results suffer as debt rises, and I did a check to see if that was true.

This runs contrary to empirical data I have seen.

The same data every finance and econ student has seen.

Successful companies finance with debt and are better off for it.

I double checked and you are correct, but it is not because the debt offers value. It is that it is a tax break and interest payments are deducted. The amount of dividends would increase if you remove this deduction. The shareholders would not be better off for it, if you remove dividend and capital gains tax instead of it.