Simply said, my opinion is that Best Buy is going the way BlockBuster did. While Netflix was Blockbuster’s nemesis; I see Amazon.com as Best Buy’s nemesis.
From my personal experience, I bought most of my electronic gadgets from Amazon using Amazon Prime for 2 days shipping. While I’m paying an annual fee for the Amazon Prime, the benefit already out-weighted the cost due to my watching videos, free book rental, and the 2 days shipping I used all the times.
I can’t help thinking that there may be a lot more people doing the same thing as I did since there is real savings from buying electronic equipments from Amazon.com comparing to buying from Best Buy.
Enough of fundamental, the most important factor is that the BBY chart looks bearish. A break thru October 2011 low of $21.79 will start another leg down.
Good Hunting!
Disclosure: I’m short BBY
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I’m not sure if you are aware of this, but BBY controls a nice monopoly here in Canada. I’m unsure if this is the same on the east coast, but they dominate the electronics market on the west coast.
I tend to agree with you, because rumor has it that Target will be moving to Canada this year. Not only will BBY be fighting a losing battle against AMZN, but also on the retail front I suspect Target will drive margins lower.
Obviously, I’m just giving you some insight into the weak technicals, because the chart of BBY looks like shit.
Mind you, who cares about Canada…I’m sure BBY only gets a small fraction of it’s revenue here.
10banger,
Thanks for the insight on Canada monopoly. Nevetheless, the Canada monopoly, being old news, is already reflected in the price.
In other words, despite having a monopoly in Canada, the price is not getting any support and the trend is still heading down.
As usual, like you, I’ve stop in place so that if I’m wrong, I’ll be out with a small loss.
Good Hunting!
Stop out of my BBY short. Chart looks perfect for a falling knife catch so I’m not going to fight the uptick.