Guitar Center Sale Rumor
Following rumors that Guitar Center Inc. is considering selling itself, the Associated Press reported this week that a Goldman Sachs analyst said the company is on track for a turnaround but could consider a sale as a last resort.
Matthew J. Fassler said he expects the company to see earnings recovering this year due to investment spending, improved capital allocation, and benefits from its acquisition of Woodwind & Brasswind. But Fassler was also quoted as saying GC is “optimally positioned for a sale” thanks to its dominant market position, capital allocation opportunities, and what he termed “a savvy shareholder base.”
On May 31, TheStreet.com boosted Guitar Center to buy from a hold position, citing a revenue increase of 13.5% in the first quarter and modest earnings gains during the past fiscal year. Guitar Center had been rated a hold since February.
From MMR Update June 1, 2007
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