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Business buyouts: what is the future for two business giants?

Consumers in Texas, and across the nation, have grown accustomed to certain big name retailers. Generally, it's hard to believe that places that have been around for several decades could be affected by the ever changing market. But with unsustainable business models threatening the very survival of these companies, it does begin to put a little doubt into consumer's heads.

According to recent news from the business world, this may be the case as two powerhouse retailers announce possible opportunities for buyouts. In the opinion of most experts, the stores Best Buy and Staples are caught between the proverbial rock and a hard place, with investors weighing each company's potential for renewed success. But which one is really worth the risk?

Despite reasonably good years during the economic downturn, Staples' stock has lost nearly 45 percent over the last five years. Best Buy seems to be in no better shape, having lost over 50 percent of its value over a similar period. In the case of Best Buy, most of its competition came from three other big-name competitors: Target, Wal-Mart and Amazon.

Disheartened employees across the nation have lost their jobs as hundreds of stores have been forced to close. Staples has reported that they are likely to lose $250 million after the huge round of closings they announced this year. Best Buy has reported a similar price tag as the company continues to close stores and cut employees.

But what does this mean for investors who may want to acquire one of these big-name businesses? Are they worth the risk? One expert suggests that you'll get just about the same result as flipping a coin at this point. He points out that sometimes, there just isn't a clear cut winner.

Source: Investor Place, "Staples or Best Buy: Which One Is Better Buyout Bait?" Marc Bastow, Sept. 27, 2012

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