Update – It was interesting to read the business section of the Dayton Daily News and see that others are finally making observations I made nearly two years ago (see below). I commend Rex’s CEO, Stuart Rose, for his resourcefulness in providing returns to stockholders. However, stockholders usually invest in a company based on it having some core competency and direction. A telling quote from the Rex CEO, “It’s awkward for an investor to understand our company today.”
Nov 5, 2006 – My son Barry wrote a few business papers last year on Rex TV, and that motivated me to take a closer look at their performance. If you’re not familiar with Rex, it’s a smaller version of “Best Buy” that is headquartered in Dayton, Ohio with approximately 100 stores located in smaller cities around the US.
I was curious how Rex could compete with a Best Buy and Circuit City. I then noticed that most of their profit was generated from investment in ethanol plants. I’m somewhat dismayed that the shareholders haven’t questioned the company strategy. What is a company that is in the “dog-eat-dog” world of consumer electronics doing in the alternative energy business? Is the name of the company “Rex TV & Ethanol Supply”?