Comparative Analysis: Can Bed Bath and Beyond emerge from the brink of bankruptcy? via /r/wallstreetbets #stocks #wallstreetbets #investing


Comparative Analysis: Can Bed Bath and Beyond emerge from the brink of bankruptcy?

Hear me out, regards. Spent the last few hours researching near-bankrupt (or bankrupt) retail stores to see how BBBY compares to them instead of working at Wendy's. My manager is mad at me now. Fuck him.

Let's do a bit of research and attempt to make sense based on our limited primate IQ.

Circuit City & Best Buy

I put these two together because they share the same sector, but one survives the other doesn't. Circuit City failed to turn around during 2008 recession completely, shutting down for good, while Best Buy is still operational today, just had their earnings report, and some apes here have been mistakingly thought we are all about about BBY. True regards.

One of the most damaging moves that Circuit City did was $1B stock buybacks. Source: https://www.richmondfed.org/~/media/richmondfedorg/publications/research/econ_focus/2013/q3/pdf/economic_history.pdf

Hey, guess what, so did BBBY during Tritton's presidency just last year! $1B dollar worth of stock buyback. Terrible idea. Stock has been spiraling downward ever since.

Even though Best Buy survived the 2008 crash, it faces yet another challenge: Amazon. What they did to turn things around is to focus on their "showrooming" and price-match challenge, and build partnership with product brands such as Apple. "Showrooming" is what big box retailers have an advantage over online retailers like Amazon. Bed Bath and Beyond better be showrooming lots of towels and scented candles.

Sears

An infamous blunder down the capitalism drain. There isn't just one mistake to pinpoint when it comes to Sears, just a series of bad decisions one after another. Some notable errors: buying K-Mart when it was already struggling, failed to capitalize on the "discounted goods" market unlike Walmart, and failure to innovate. Very small e-commerce presence. Amazon took their customers like candies from a baby. Stores were not being maintained, and friction between upper management and employees are just icings on their bankruptcy cake.

To their credit, they did put some efforts, and did some right things, but more wrongs than rights.

More stuff to read here.

Six Flags

These guys managed to get out of the grip of bankruptcy because some hedgies and investment companies spent a whopping $725 million in debt restructuring and capital infusion, effectively reducing their debt from $2.7B to $1B. A whole lot of breathing room to invest that much capital on growth. This is somewhat similar to BBBY that JP Morgan decided to recapitalize with that $400M juice.

Source

Starbucks

Out of the 2008 economic meltdown, this one shines out and bright. You can order your pumpkin spice latte pretty soon, you millennial apes. What they did right was they closed down stores as they expanded too rapidly, shifted their focus back to customers, building relationship and brand awareness through social media and customer engagement.

Source

There are more stories out there which you can search and read them yourselves. Too long for a reddit post. Many of you regards are illiterate anyway unless there are rocket emojis so here they are πŸš€πŸš€πŸš€πŸš€πŸš€πŸš€.

What about BBBY?

  1. BBBY will receive capital infusion from JP Morgan and RC Ventures (to be revealed tomorrow), just like Six Flags did. This is good news.
  2. There is a desire and need of restructuring and changes from the management. This is also good news. At least, they aren't sitting on their asses like Sears did.
  3. Store closures. This can be both good and bad.
  4. Bankruptcy is more likely out of the table. What Sue with reveal tomorrow will determine all your bets. Although at this point, I am just thinking the only way this company can go even lower is bankruptcy news. Since it's unlikely, it's just up from here on.

More mandatory rocket emojis πŸš€πŸš€πŸš€πŸš€πŸš€

Submitted August 31, 2022 at 05:32AM by soareyousaying
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