Circuit City Short Circuits

January 16, 2009 1:34PM

(bettertrades) - On Friday, Circuit City (CC) announced it will liquidate all assets, failing to attract financing following its Chapter 11 bankruptcy filing in November. Circuit City shares were delisted and existing shareholders will be wiped out entirely. About 35,000 employees will be affected by the dissolution of Circuit City, exacerbating an already tenuous labor market.

Great American Group, Hudson Capital Partners, SB Capital Group, and Tiger Capital Group were appointed as liquidators. Last summer, Blockbuster (BBI) made a surprise $1 billion takeover bid, but subsequently withdrew its offer as market conditions deteriorated.

In its bankruptcy filings, Circuit City reported $3.4 billion in assets and $2.32 billion in liabilities as of August 31, 2008.

Shares of Best Buy (BB), the nation's largest electronics retailer and Circuit City's main rival, surged on Friday with analysts pricing in captured market share as a result of the liquidation. Best Buy, along with Wal-Mart, now holds a near-monopoly on the electronic superstore market.