Best Buy: Dead or Born Again?

NEW YORK (TheStreet) -- Talk about a split. Best Buy (BBY) reported second-quarter earnings Tuesday and the media was caught between declaring bankruptcy and opportunity at hand.

Perhaps that's why we have two hands.

On the one hand was Minyanville, asking in a headline: "Is Best Buy Heading for Bankruptcy?"

You got that? With competition from Apple (AAPL), Amazon (AMZN) and Wal-Mart (WMT), Best Buy's earnings were so bad that they are headed for a one-way ticket to financial Palookaville.

The Wall Street Journal, on the other hand, weighed in with: "Best Buy's Results Give Schulze 'More Leverage'."

You get a load of that 'un? There, the weak earnings give the company's founder and largest shareholder more of a foothold to marshal forces and mount a takeover.

But do either of these articles have a fatal flaw? Do either leave out a factor that might prove decisive? At this point, you can't find too much to stand in the way of a bankruptcy argument, but this quarter was so abysmal that viewing it as a springboard to a takeover neglects a point The Wall Street Journal should have mentioned: it will be harder to get bankers on board to assist in financing a deal.

Granted, founder Richard Schulze is willing to break into his own piggy banks, but that's only for $1 billion. He'll need help with the rest and after a second-quarter that seems to point toward to the possibility of bankruptcy, additional financing will be considerably harder to come by.

This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.

At the time of publication, Fuchs had no positions in any of the stocks mentioned in this column.

Marek Fuchs was a stockbroker for Shearson Lehman Brothers and a money manager before becoming a journalist who wrote The New York Times' "County Lines" column for six years. He also did back-up beat coverage of The New York Knicks for the paper's Sports section for two seasons and covered other professional and collegiate sports. He has contributed frequently to many of the Times' other sections, including National, Metro, Escapes, Style, Real Estate, Arts & Leisure, Travel, Money & Business, Circuits and the Op-Ed Page.

For his "Business Press Maven" column on how business and finance are covered by the media, Fuchs was named best business journalist critic in the nation by the Talking Biz website at The University of North Carolina School of Journalism and Mass Communication. Fuchs is a frequent speaker on the business media, in venues ranging from National Public Radio to the annual conference of the Society of American Business Editors and Writers.

Fuchs appreciates your feedback; click here to send him an email.