The credit crunch is here. Just ask Circuit City about the availability of credit or the state of consumer electronics sales. But even during the current crunch and downturn, life goes on, as do the credit market and consumer electronics sales. A few short items show the electronics market, while not as good as people would want, is not as bad as it could be.

Matt Brennesholtz
Insight Media Analyst

• Circuit City obtained court approval to borrow as much as $1.1B to finance operations on an interim basis while it restructures. (Note: they have permission from the courts to borrow it, but there has been no announcement about a bank actually lending it) In addition, Mexican Billionaire Ricardo Salinas Pliego took a controlling interest when he bought 30.4M shares at bargain basement prices of $0.22 to $0.26 per share. Current price is $0.19/share, up from a 52 week low of $0.06. See the December LDR for the full story.

• Access IT, whose name should change to Cinedigm in February, announced it has signed an $8.9 million credit facility. The facility will fund the launch of Cinedigm’s first 137 Phase 2 conversions of Premiere Cinemas’ theatres to the Company’s digital cinema platform. This represents about $65K per screen. Since the phase 2 program includes 10,000 total digital screens, Cinedigm will need about $650M in financing over the three year life of the Phase 2 plan. There has been much discussion about the lack of funding to finance this rollout, so at least this is a start.

• Panasonic is seeking to buy Sanyo at 120 Yen ($1.26), a 25% discount compared to the previous closing price for Sanyo. Even so, the offer puts the market value of Sanyo at $7.7B, which Panasonic would need to close the deal. This is said to be a 20% premium over what Panasonic believes to be the true value, after the share value is diluted by a conversion of all the outstanding preferred shares. Goldman Sacs, a major investor in Sanyo, is also now balking at the deal. Stay tuned.

• The world’s largest cell phone maker, Nokia, said on Tuesday its €264M ($339.9 million) acquisition of British software firm Symbian was on track to be closed this year. "The Symbian deal is on track," Mary McDowell, Nokia’s chief development officer, told Reuters on the sidelines to Business Week’s European Leadership Forum in London.

• In light of the current economic and financial crises, iSuppli Corp has trimmed its forecast for LCD TV shipments, but still anticipates growth in 2008 and 2009. iSuppli now forecasts global LCD TV shipments will amount to 93.4 million units in 2008, down nearly 6% from its previous prediction of 99 million. iSuppli also reduced its previous forecast of 124 million units for 2009 to 112.6 million units for the year. This reduced forecast still represents a 21% year over year growth, respectable growth by any measure.

• The radio and the auto executives have been telling us car sales are down 33% from what they expected. Turn this around: 66% of the people who want a new car are still able to borrow enough money to buy one. Gasoline here in Norwalk CT has dropped below $2 per gallon. Cadillac Escalade anyone? If you still feel guilty about gas and expect the price to go up, buy the hybrid. It gets an estimated 21 - 24 MPG on the highway, compared to the standard 18 MPG. Don’t forget, whether it is a Prius or an Escalade, there are a lot of electronics in a hybrid car, including the displays.

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