Circuit City to liquidate V2

Michael O'Dell mo at
Mon Jan 19 18:22:19 CST 2009

Extra points if you solution involves a
convex manifold in Dilbert Space.

Philip Miller Tate wrote:
> Maximize profit = minimize losses.
> Assume that the minimization of losses equation is modelled by a  
> polynomial, the only constraint upon which is that one of the  
> solutions is x = 0. This represents the solution that zero commerce =  
> zero losses, i.e. doing nothing costs nothing.
> Discuss why short-term profiteering, plus a constant requirement of  
> expansion, as required by International Law, always eventually leads  
> to this solution. Conclude your essay with the word <sigh>.
> Phil M1GWZ
>> Andre:
>> The problem with above is that the CEOs and CFOs are using very  
>> short-term
>> yardsticks to keep shareholder dividends artifically high, at the  
>> expense of
>> long-term viability.
>> I think Mike's point can be that while this philosophy does keep  
>> dividends
>> up, the long-term viability of the company is being destroyed from  
>> within.
>> Once that company fails due to mismanagement, it becomes clear that
>> shareholder value is no longer there.  How much value do the  
>> shareholders
>> get from Circuit City once it's gone, as an example? Dividends of  
>> $0, and
>> stock selling price of $0 does not provide much shareholder value.
>> Hopefully these ratbas****s can be sued for their irresponsibility.
>> One can say that purchasing stock is inherently a crap shoot, and  
>> too bad
>> for you if you buy stock and lose.  But, over the last few years it  
>> seems
>> that CEOs and CFOs LIVE to meet the next quarterly meeting with  
>> Wall Street
>> analysts.  In my opinion, more should tell Wall Street to go pound  
>> sand, and
>> do what's best for the long-term stability of the company.  But, being
>> realistic, instant gratification is more visible.
>> It's like crack for CEOs.  Do the stupid thing to keep Wall Street  
>> happy.
>> Interestingly, in at least one occassion close to me, Wall Street has
>> already branded the company (indeed the whole industry) as  
>> "traditional" and
>> in decline.  So, trying to please the street will not help the  
>> company much.
>> They are destroying the company while trying to curry favor from  
>> someone
>> that will never give it.
>> Of course, the stockholders are interested in their dividends, so  
>> as long as
>> those are propped-up, they are happy, instead of worrying about if the
>> company still exists to pay those dividends two years from now.
>> Off the soapbox.
>> Terry
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