Why would any music retailer think this is a good idea? Because he’s trying to find a way to Defend & Extend the Success Formula he built when music sales required a physical product.
The stock remains highly priced largely on the belief he’s building a war chest to do great hedge fund deals, but so far he’s not demonstrated Sears and KMart give him the resources to pull that off.
Microsoft’s Lock-in to their old Success Formula has kept them out of these new markets.
Media is now losing money, and forced to make debt payments, while its primary competitors (the Murdoch-controlled Sky and British Telecom) are in far healthier financial shape.
Instead of putting money into more stores, management would start buying back shares in order to reduce the size of the equity pool
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