![]() Particularly in a tight commercial real estate market, bad news for one brand means opportunity for another. It will not take long for retailers to occupy those spaces.” “A lot of great real estate is going to come available into a market where there’s been no vacancies. “E-commerce scared a lot of people off from building retail,” said Brandon Isner, the head of retail research at CBRE, a commercial real estate firm. Anthony Behar/Sipa USA/APīed Bath & Beyond was a retail pioneer. It would be inconsistent of all of us to clap like seals at Redditors putting a painful short squeeze on some hedge fund betting against GameStop and then say that the government must step in to save Bed Bath & Believers from themselves.People walk past the entrance to a Bed Bath & Beyond retail store along Sixth Avenue in New York, NY, September 4, 2022. ![]() ![]() I think that it smells bad, but this is now the shape of our financial markets. Maybe companies should be able to sell stock that they know is likely to wind up worthless in short order, as long as they disclose it in the clear terms Bed Bath did, and maybe any efforts to stop it would be a gross overreach by the nanny state. Trump Attacked a Court Clerk During His Civil Trial. The Supreme Court’s Right Flank Is Laying Groundwork to Dismantle Defendant Rights Hitchcock’s Adaptation of One of Roald Dahl’s Most Famous Stories Edited Out the Racism. How the Host of One of the Most Popular Podcasts Made America’s Favorite Hairstylist Cry Over Trans Rights It’s possible that some big financial institutions desperately wanted a piece of pre-bankruptcy Bed Bath, but that’s not usually how financial institutions get big. It could then sell it at market prices to (presumably) retail investors and make a quick profit. Why would a sophisticated hedge fund buy the stock of a company that was rather clearly knocking on death’s door? The structure of the deal made it clear: As long as the stock stayed above certain (very low) levels, Hudson Bay would buy millions of dollars of it from Bed Bath at market discounts. The lead investor, which seemed to be buying all or almost all of the stock, was a hedge fund called Hudson Bay Capital. In February, the company said it had raised $225 million in the offering and could wind up with an additional $800 million in the next 10 months if things went well. But this move was atypical too, because the company was clearly on the verge of bankruptcy, something it disclosed in its Securities and Exchange Commission filing to sell new stock. As the year kept going on, sales kept being bad, and Bed Bath’s walking-around money kept shrinking.Īs the situation deteriorated this past winter, Bed Bath did the more typical memestock move and sold some stock. Ryan Cohen, the rich-guy investor whom memestock retail traders tend to follow, said he was getting out of his stake. But it became clear over the following year that Bed Bath really could’ve used the billion bucks it spent on that buyback for other things, such as investments in its actual business, to make the company more sustainable. The stock quickly went up, as it does in these cases. It was maybe not nuts either, as Bed Bath’s stock had dipped in the weeks before the announcement and wasn’t as expensive as it would’ve been at the absolute height of its trading. And in November 2021, at the end of a fun year of memestocking, Bed Bath announced an acceleration of its buyback program. Since at least the mid-2000s, the chain had made a habit of buying back its own stock, which provides a short-term price boost and (at least in theory) signals confidence.
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