Before we all get ahead of ourselves, lets make sure this deal goes through, and lets see how it impacts earnings. Everyone knows in our short term oriented market that earnings are very important, and if this deal causes an earnings drag it could cause a short term stock drag along with it.
Finally, we need to see how many stores they are closing. I would submit an interesting theory. Under general accounting rules, land is held at the value it was purchased at. Now, lets say Comp USA decides to close the Dallas CC store, which it might as well since there is another Comp USA near it. They could sell the store. The land that the CC is sitting on is very valuable since it is near a major interchange. So they could make, on a store by store basis, a lot of money by simply selling off the stores they don't need. A lot of hidden worth there. And it would reduce the amount of effort to be put out to fold in the existing stores into the Comp USA family and get them under control.
Still, some uncertainty ahead so that could put a damper on things for the next few quarters. But after that, its going to look like the space shuttle. |
