Best Buy: Go Private or Die?

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Are Best Buy’s (NYSE:BBY) only two options to go private or go bankrupt?

Jim Cramer, the host of CNBC’s “Mad Money,” does not agree with that simplified assessment. In an article published on financial news website TheStreet, Cramer outlined a different avenue, which he termed the muddle-through strategy.

“There was vast confusion involving this stock, because it became binary: It was either going to get a bid to go private or it was going to go to zero,” he wrote on Wednesday. “This last set of numbers, however, has shown that there’s a third path: a muddle-through strategy of a smaller, more lean and less profligate company that isn’t all things to all people all over the country but just a solid operator that can make money.”

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He argued that Best Buy can be a profitable company given the right management, but that does not necessarily mean a buyout is the right choice.

Best Buy has been hurt by Amazon (NASDAQ:AMZN). The Internet retailer’s increasingly tight hold over the retail market has come at the detriment of many brick-and-mortar retailers, such as Best Buy. The company’s struggle with showrooming has become almost notorious. Best Buy’s shares lost 50 percent of their value last year as the practice of showrooming dragged down same-store sales. Electronics shoppers are increasingly using the retailer’s stores to examine and test products before purchasing them from cheaper Internet companies like Amazon, and this tactic contributed to a drop in same-store sales of 4 percent in the last nine months of 2012…

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