The word on the street (actually, it’s Bloomberg) says that Bank of America has given Circuit City a $1.1 billion loan that will help cover its operating expenses until it’s expected to come out of bankruptcy next year. But before you make your shopping lists for Black Friday, consider this:
The chain obtained financing in the midst of a global credit crunch that has forced some companies to put off bankruptcy filings for lack of funding, said CreditSights Inc. analyst Chris Taggert. Circuit City’s loan may not be a sign that that the crunch has eased, given that Bank of America and other lenders were largely repackaging existing credit lines, he said. “This $1.1 billion isn’t $1.1 billion of added liquidity, so the words aren’t as good as the music,” said Taggert.
So, all this does is buy the chain time. Perhaps it will work for them. Perhaps they will die a slow death anyway. We’ll see.
In the meantime, my advice is that if you have a gift card from Circuit City, I’d use it now. You may not get a chance to if you wait too long.
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This entry was posted on November 11, 2008 at 3:37 pm and is filed under Commentary with tags Circuit City. You can follow any responses to this entry through the RSS 2.0 feed.
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Circuit City Lives…. Maybe….
The word on the street (actually, it’s Bloomberg) says that Bank of America has given Circuit City a $1.1 billion loan that will help cover its operating expenses until it’s expected to come out of bankruptcy next year. But before you make your shopping lists for Black Friday, consider this:
The chain obtained financing in the midst of a global credit crunch that has forced some companies to put off bankruptcy filings for lack of funding, said CreditSights Inc. analyst Chris Taggert. Circuit City’s loan may not be a sign that that the crunch has eased, given that Bank of America and other lenders were largely repackaging existing credit lines, he said. “This $1.1 billion isn’t $1.1 billion of added liquidity, so the words aren’t as good as the music,” said Taggert.
So, all this does is buy the chain time. Perhaps it will work for them. Perhaps they will die a slow death anyway. We’ll see.
In the meantime, my advice is that if you have a gift card from Circuit City, I’d use it now. You may not get a chance to if you wait too long.
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This entry was posted on November 11, 2008 at 3:37 pm and is filed under Commentary with tags Circuit City. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.