Best Buy’s Schulze Acquires 585K Shares

Analysts say that the move signals his confidence in the company's outlook; the company founder and chairman has historically "sold into strength and bought into weakness."

Best Buy Company, Inc., founder and Chairman Richard Schulze will hold on to 585,000 shares of the company that he recently acquired through options exercises-a move that analysts say signals his confidence in the electronic retailer's outlook.

The acquisition, which involved options that were about to expire, was valued at about $14.4 million, according to a U.S. Securities and Exchange Commission filing.

Schulze-who opted not to sell the shares for a profit-bought 573,750 of them for $24.71 per share and the remaining 11,250 for $20.65 per share. Best Buy's stock was trading at $30.03 Thursday afternoon.

According to Dow Jones, Schulze-the largest individual holder of Best Buy shares-has historically “sold into strength and bought into weakness.”

“He does seem to look long term, and he can afford to lose in the short term to win in the longer term,” Jonathan Moreland, research director at Insiderinsights.com, recently told Dow Jones. He added that Schulze “is a good barometer of his shares' prospects.”

Amid the downturn in 2008, when Best Buy shares fell by more than half, he reportedly bought $39 million in shares and exercised options on another $5.5 million. Then in 2009, Schulze reportedly sold about $27 million worth of shares at prices ranging from $36 per share to $43 per share.

Just a year ago, Schulze reportedly exercised and held on to shares worth $31.17 each that he acquired through a $28.4 million transaction. Best Buy's stock was trading at about $42 at the time.

At its annual investor and analyst meeting on April 15, Best Buy outlined a growth strategy that includes reducing the size of its traditional “big-box” stores, opening more mobile stores, adding hundreds of stores internationally, doubling its Web sales to $4 billion within five years, outsourcing music and movie departments, and pursuing growth opportunities in four key areas-mobile phones, tablets, gaming, and appliances.

Best Buy is Minnesota's third-largest public company based on revenue, which totaled $49.7 billion for the fiscal year that ended in February 2010. The company reported $50.3 billion in revenue for its most recently completed fiscal year.

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