Rock’em, sock’em…

May 13, 2005

In the 10-K that it filed this morning, Circuit City (CC) had some interesting disclosures about its ongoing war with RadioShack (RSH) over the fate of the more than 900 RadioShack stores it currently operates in Canada, but which it is in the process of renaming The Source by Circuit City — something it plans to do by the end of next month. Over the past few weeks, ever since a judge in Texas ruled that the Canadian stores could no longer use the RadioShack name, the two have been putting out dueling press releases. RadioShack has said it plans to open 20 to 30 of its own Canadian stores by the end of the year, while Circuit City has said that it still holds the rights to the RadioShack name until 2009.

In the K, Circuit City says in several places that it plans to rename the stores and even warns of the change in its list of risk factors, since the Circuit City name is not really known in Canada, while RadioShack has been in the country for over 35 years. But it provides no information on the cost of renaming 900-plus stores and rolling out the new brand name. Nor does it provide any information on how much the ongoing legal battle — it says it still plans to fight the Texas court ruling — continues to cost investors.

Meanwhile, shares of both companies are lagging when compared with BestBuy(BBY). So here’s a novel solution that doesn’t involve teams of attorneys, dueling press releases, and jobs for lots of Canadian signmakers: for a meager $19.95 (plus shipping) the CEOs of the two companies can buy the Rock’Em Sock’Em robots and duke it out that way. It would be a lot more fun to watch and a heck of a lot cheaper for investors.

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