Best Buy Co., Inc. (BBY) Preparing Bull Trap

Microsoft Corporation (NASDAQ:MSFT) has had some victories. Its Xbox game machine has taken command of the U.S. gaming market, and Office has maintained its share with lower prices and online subscriptions.

But the Windows franchise remains under threat, because the company is just not competitive – on prices and feature – with iPad tablets and Android phones. The Best Buy Co., Inc. (NYSE:BBY) stores are meant to address that problem, as is Windows 8.1, a replacement for last year’s failed Windows 8 which is being rolled-out free to those customers, but betting on success is a speculation, at best.

You can believe in the Microsoft story, in other words, but that will be fueled by belief, and not reality. Stories like that do work in technology, sometimes. But only sometimes.

My Foolish take

Once the August numbers are out, however, there will remain time for you to get out, because you’ll probably read a lot of stories about Microsoft engineering a buyout, about how it “has” to buy Best Buy Co., Inc. (NYSE:BBY) because it’s so wedded to that company’s channel.

Don’t buy it. Sell when you have a profit. Let the Schulze-Microsoft Corporation (NASDAQ:MSFT)-BestBuy board machinations take care of themselves. Whoever wins that game, shareholders are almost certain to lose it, because there’s no one else they can squeeze out for their profit.

Investors are much better off in Microsoft than in Best Buy Co., Inc. (NYSE:BBY), but I’m not personally convinced that Microsoft is getting off the mat here, so I’ll remain on the sidelines.

Dana Blankenhorn has no position in any stocks mentioned. The Motley Fool owns shares of Microsoft Corporation (NASDAQ:MSFT).

The article Best Buy Preparing Bull Trap originally appeared on Fool.com.

Dana is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.