Best Buy Founder Buys $20 Million Worth of Shares

by Warren Seah

Best Buy (BBY) has experienced a 20% decline in its stock value this year, while the S&P 500 has seen a 14% drop. The fourth-quarter earnings reported in March were mixed, and the first-quarter report in May met expectations. Analysts are concerned about the tough upcoming comparisons, as demand for work-from-home devices was high last year due to stimulus payments. Experts predict that the second half of the year could be even more challenging.

Richard M. Schulze, the founder of Best Buy, recently purchased nearly $20 million worth of shares in the electronics retailer. He bought 250,000 Best Buy shares on May 25th at an average price of $79.60 per share. This transaction was made through a trust owned by Schulze, which now holds a total of 20.5 million Best Buy shares. Additionally, Schulze owns an additional 1.8 million shares through various vehicles such as limited partnerships, retirement accounts, and a family foundation. With these holdings, Schulze remains the second-largest shareholder in Best Buy.

Schulze’s family office stated that he made the purchase in response to the market’s overreaction to consumer stocks during the recent market selloff. The attractive price-to-earnings (P/E) trading range of Best Buy presented an irresistible value opportunity for Schulze.

It is worth noting that this is not Schulze’s first major stock purchase in Best Buy. In October 2008, he acquired 1.76 million shares for $39 million, with an average price of $22.18 per share. At that time, Schulze was still serving as chairman and continued in that position until 2012. He had also previously held the role of Best Buy’s chief executive from 1983 to 2002.

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