Brick-and-Mortar Meltdown Continues. Revenues Collapsed by 55% since 2017: Share buybacks and Ecommerce killed it.
By Wolf Richter for WOLF STREET.
Bed Bath and Beyond finally filed for Chapter 11 bankruptcy on Sunday and said it will liquidate its assets, and close its remaining stores, unless it can find a bidder for the Bed Bath and Beyond stores and for the buybuy BABY stores, in which case it would keep the stores open to retain value for the bidder. If it cannot find a buyer, that’ll be it. It said the liquidation sale of its assets has begun.
A year ago, the bond market started seeing a bankruptcy filing and prices of the bonds began to collapse. By August 2022, suppliers got cold feet and halted shipments due to unpaid bills. When this came out, its 30-year bonds, issued in 2014, plunged to 16 cents on the dollar (by Friday, they were at about 5 cents on the dollar).
While this was going on in 2022, the company promoted its latest turnaround plan and closed hundreds of stores. But you can’t turn around a failing brick-and-mortar retailer. On January 5th this year, the company issued a “going concern” warning.
On January 26, it disclosed that it had defaulted on its credit line with JPMorgan, and reiterated that it may have to file for bankruptcy. On February 1, the company failed to make an interest payment on $1 billion in bonds. A few days later came the company’s last-ditch share-sale scheme with Hudson Bay Capital, which effectively finished off its shares though it was able to raise some cash, which delayed the bankruptcy filing.
Nothing had worked, not even the wild pump-and-dump schemes among the meme-stock jockeys that caused shares [BBBY] to spike by fantastical percentages in no time, only to totally collapse in hours or days. On Friday, before the bankruptcy filing, shares closed at 23 cents. When a retailer goes bankrupt, there are few assets and lots of debt, and it’s over for the shares, they’ll vanish.
Bed Bath and Beyond was inducted into my pantheon of Imploded Stocks in June 2022. Here’s the wild-ride meme-stock chart. We’ll look at a long-term chart in a moment (data via YCharts):
To make it through the bankruptcy process while operating, the company obtained a $240-million debtor-in-possession (DIP) loan from Sixth Street Specialty Lending. DIP financing has priority over other debt and equity in the bankruptcy and will be paid back first.
It said that, while it’s in the process of shutting down, it “intends to uphold its commitments to customers, employees, and partners, including continued payment of employee wages and benefits, maintaining customer programs, and honoring obligations to critical vendors.” Until stores close, they and the website will remain open for business.
The company said that it will try to sell the Bed Bath Beyond stores and buybuy BABY stores. If it succeeds in finding a buyer during the bankruptcy proceedings, it “will pivot away from any store closings needed to implement a transaction,” it said in the announcement.
$11.6 billion in share buybacks killed Bed Bath & Beyond.
In 2021, as the company was already teetering with revenues in free-fall, and just a year before it defaulted on its bonds, it wasted and incinerated $1 billion on share buybacks, a mindbogglingly idiotic decision that ended up killing the company. Everyone that had anything to do with it should be sued.
In 2014, it wasted and incinerated $2 billion on share buybacks, instead of investing this cash in its ecommerce operation and trying to get out of the brick-and-mortar stores gracefully, while it still could.
Since 2010, the company wasted an incinerated $9.6 billion on share buybacks. Since 2005, it wasted and incinerated $11.6 billion on share buybacks.
These are the cumulative share buybacks – the $11.6 billion that the company incinerated to “return value to shareholders.” Shareholders and Wall Street demand that the company do this, and they got it. There are no victims here (data via YCharts).
Ecommerce killed it.
Bed Bath and Beyond is the latest in a very long list of big retailers – from Sears on down – that were felled by ecommerce, as Americans changed the way they buy, and these retailers couldn’t adapt fast enough. This is structural, and it continues, and no one is going to be able to persuade Americans to go back to their old ways. Back in 2017, when that process took on momentum, I started calling it Brick-and-Mortar Meltdown.
Revenue growth of Bed Bath and Beyond began to flatten in 2012, despite inflation, and began to fall in 2018.
The company has not yet reported its revenues for its fourth fiscal quarter, which ended at the end of February. But it said that it had another fiasco over the holidays due to inventory shortages and other issues, and projected revenues would be down 32% year-over-year. With this, we can estimate its fiscal year revenues to come in at about $5.6 billion, a plunge of 55% from 2017. You cannot restructure something like this. This company has destroyed its business:
The meme-stock ridiculousness.
Bed Bath and Beyond was already in the $5-range in April 2020, and that was a good place to be. But then the meme-stock jockeys played their organized pump-and-dump scheme, during which the shares spiked by something like 1,000% to 53.90 intraday in January 2021, only to collapse, and spike, and collapse, and spike…. This stuff is really nuts. Again there are no victims here.
But take a look at 2010 through 2015: this was a period of huge share buybacks, and they drove up the shares, and beyond that, they began to drive the company into liquidation to release shareholder value, as it’s called. Shareholders and Wall Street demanded it, and they got it alright (data via YCharts).
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Went there once back in 2019. This should have happened long time ago
All I ever saw there was over priced junk. I can’t believe anybody ever shopped there twice.
Other than consumables like food, online is the only way to go now. Brick/mortar stores have poor selection and inventory. I never want to waste another afternoon driving around and parking, only to be frustrated when I get there. I occasionally shop at second hand stores, run by charities. My friend asked me for a quarter (25 cents) and came out with a set of spoons that she needed.
“All I ever saw there was over priced junk. I can’t believe anybody ever shopped there twice.”
The first and last time I shopped there (bedding) it was before the GFC, and for exactly that reason.
but like so many
the HEDGE FUNDS MADE MINT and BANKED IT
before 2nd or 3rd bankruptcy
now with no more carcass left
time to liquidate and let banksters eat leftover losses
There are some things I want to see and buy in person. And there are other things I only want shipped to a store in a wrapped pallet, rather than bouncing around a truck in a poorly protected box.
But I agree, there’s way more physical stores than we need, and like commercial office space, they’re taking up valuable space.
Online has become a game of chance these days. Amazon commingles actual legitimate products with knock offs, so you never know what you are going to receive.
In the city of Bellevue outside Seattle, there’s a huge apartment complex being built at an old Sears location.
I’ve seen it happen all over the Seattle suburbs. Old retail buildings and strip malls are being razed and replaced by apartment complexes.
Yeah me too, I’m actually going to miss seeing the things I’m going to be buying and even getting to have it same day without waiting on delivery people. Maybe BBBY was different in the US but here in Canada a lot of the stuff they carried wasn’t exactly junk, it was better than Ikea but not high end, it was just too expensive usually and stuff you could more easily buy online after seeing it in the store, my current place has curtains from there, possibly few other items I can’t remember. I’m not surprised they’re gone though, Bed bath beyond would be like a last resort type store if you couldn’t find it or if it needed to be the perfect style you’d go in there hoping they have it because nowhere else had it. Well, that’s not what you want when you have so much floor space and inventory. These days people either want the cheapest version of whatever they need/want from like Ikea or Walmart or online.. or they have money and want high end, not much demand for middle of the road so even going ecommerce Bed bath beyond would probably still be dead.
Still, that once in 5yrs I really need something and can’t get it elsewhere because it’s sold out or whatever and I’m willing to overpay just so it’s done, that’s not possible anymore, RIP overpriced emergency home crap store.
BB&B was one of thousands of mini-monsters bred out of money-printing/debt addiction.
Other than churning and skimming paper fiction, not much holds the U.S. economy together.
AS A FORMER JCPENNEY CO BUYER, ONLINE BAIT N SWITCH WILL DESTROY GOOD WILL!
Here’s a good brick and mortar experience
Grandad : Excuse me, I want to buy the thing that I saw on the TV with the George Lucus, the girl in the phone.
Apple salesman : Girl? In the phone? Not sure I know what you are talking about. We have a lot of stuff in our phones, but I am not sure if girls come in the phone…. I wish!!
Not that I would every go to an apple store…..happy with my Android.
BBB def was not junk. It was a lot of the same items you see for sale at the likes of Williams Sonoma.
For home cooks and home makers it really was a breath of fresh air to go walk around in one. They were usually clean and the sales people left you alone. Yeah the prices were high but they did have a coupon system that most knew about.
There also were some stocked like a pharmacy, which was handy when traveling in a new area.
I think the pandemic killed BBB, not ecommerce. And the fact that Americans have to have cheaper goods because they have less money to buy with. BBB had higher ticket items, wedding registries etc.
heck you can’t even find some of their items that they sold on Amazon. That tells you something.
Agree and more. Over 25 years, I made several significant purchases, for kitchen, bath, and especially valence curtains. Products always performed well. I suspect they hired good buyers, even as recently as 2017, when last I did their brick and mortar in Fresno, CA. The employees reminded me of the folks at Trader Joes–BB&B did a good job of selection; they were informed and friendly. Although it got better, BB&B’s earliest www performance was lousy, as per my experience. Slow, initially inept online adaptation, the general brick and mortar decline, and financial shenanigans left the company ready to collapse under the stress of the reaction to COVID 19.
What I believe is that the goods BBB focused on providing simply fell out of favor with the general population. Millennials don’t cook and for the most part … families that do (mine included) have what we need already.
…why businesses/nations of all types need to keep the SWOTter at hand and employ it frequently…
may we all find a better day.
Share buybacks is a casino rule that ensures that the house wins most games. It keeps the odds on the sides of the 1%.
I believe that without share buyback being made legal in the 80s (it was considered security fraud before), we would not have heard about Warren Buffet.
Share buyback allows board and CEO to “Never lose shareholder’s money”.
Here is the algorithm the 1% use:
1. Find a decent profitable company and buy its shares.
2. Get the company to either grow market by improving business, or pump margins via unsustainable cost cutting (while spoiling product quality and reliability), or pump stocks through big bubble announcements (eg. AI, cryptos etc).
3. When stepb2 stops working, start leaching company with Share buybacks, so that the 1% always make money.
4. Because share buybacks don’t leave company with any cash for bad times, these top companies (like airlines, aircraft manufacturers, chip companies) needed big bailouts during pandemic. So the 1% get out before the company hits a rock and rolls over.
So, beware of companies that burn cash on share buybacks rather than investing in future of core business. These companies today include many big names in Tech, and they can find it hard to survivea downturn!
I’m not so against share buybacks. If I am an investor and the company is diluting shares by paying its employees with shares it only right that the company buy back that devaluation of shares. If they dont buy it back then you are asking the investor to pay the companies employees.
…so, if I hear you correctly, stonks now really DON’T equate to ‘ownership’ in a company (wherein the ownership has been traditionally expected to pay its employees) as i was taught was the case in years waay past?
The tools have, indeed, become more important than the mission. (…the casino’s bright, lying numbers more than the product of farm or factory…).
may we all find a better day.
Why would anyone think that BBBY would somehow be a viable business if only it had $11.6 billion more to burn?
Often the best place to invest is somewhere other than a dying company with a flawed business model…
The scheme wall street uses on the so called merge acquisition deals works just like the Sopranos “Bust Out” scheme with Ramsey Sports and Outdoors. The CEOs of the target company are all David.
> “the company’s last-ditch share-sale scheme with Hudson Bay Capital, which effectively finished off its shares though it was able to raise some cash, which delayed the bankruptcy filing. …”
As I think it went, the deal produced cash from Hudson for BBBY, for shares being issued at a discount to Hudson, in a way that could only be profitable as long as more suckers, retail meme folks or whoever, were lining up to buy more shares (directly in the face of a probable wipeout of their shiny new shares to zero in bankruptcy). Apparently it is fine to do some financial engineering if you have suckers willing to overlook the written warnings and disclaimers staring them in the face, and buy an asset almost universally expected to have zero value, pronto. I guess it is an extension of the lingering meme-bubble era “consciousness.” These are weird times indeed. The weirdness will continue until enough suckers are penniless.
Okay, Google looking at you.
Our local (Tucson) Hobby Lobby is totally rearranging the store to make room for BBBY merchandise and making some departments smaller. I buy a ton of yarn from them and that has been almost cut in half. The closest Michael’s to me moved to a bigger location and cut their yarn department down to almost nothing, so Hobby Lobby was my go to. Amazon has lots of yarn, but the wait can be up to three weeks. I like to see and feel yarn in person, so it’s super frustrating that they cut that department so much to make room for BBBY stuff. I haven’t been to BBBY in years, and I won’t by that stuff at Hobby Lobby either. It’s a wonderful craft/hobby store and they’re going to ruin it.
…I sense your brow, knitting, Cat (sorry, couldn’t resist…).
may we all find a better day.
They had good products (says my wife anyway) when they first started. Too bad but natural business cycle
Just wait. The PE & VC sharks will soon devour the dead body of BBBY so they can resuscitate what’s left, load it up with debt, quickly bail out with their customary 7x – 10x return on investment and let the corpse rot again.
It’s the same game every time a major company goes bankrupt. Another zombie company comes back to life just long enough to take a chunk out of uninformed retail stock gamblers accounts
In the case of a distressed LBO, it’s the lenders that are the ones that have a chunk taken out.
How about a Chinese company taking over the name and mail order business and being the supplier as well as the company making the retail markup……For example I have noticed a lot of stuff labelled Kodak lately that has nothing to do with film all made in China….like disposable razors.
“natural business cycle”
Could you say more about this? Is it anecdotal or is there a theory or standard term?
I’m interested in how various documented cycles scale.
Pls disregard. : )
Look up 18.6 year cycle pretty amazing
They used to have great quality cotton linens/towels with a decent design selection at prices comperable to Sears and Penny’s (and look where those two are now, although Penny’s is hanging on and still has decent home goods). Last few times I went in BB&B to buy sheets, most all of the ‘nice looking’ bedding was that cheap quality microfiber crap that’s itchy and doesn’t breathe, for twice what cotton sheets go for on Amazon. The cotton stuff was marketed as premium and priced through the roof.
In general I always thought it catered to a specific demographic of housewife that didn’t want 1995 to end. Alton Brown hammered the final nail in the single-use kitchen gadgets fad in his original run of Good Eats. Their interior decor offerings never stopped catering to mid-90s Tuscany and their outdoor stuff was ugly crappe. Like Wolf said, they should have bagged out on brick & mortar long ago when it made sense. I had no interest visiting our local BB&B in its last 3 days when it was 80% off storewide.
“a specific demographic of housewife that didn’t want 1995 to end”
A lot of people still wish it was 1995. I think it’s the demographic of the housewife in general that has come to an end.
Demographic of the housewife came to an end in the 1970s.
It was. a pretty great year.
The music around ’95 was a hell of a lot better. But maybe that’s just the onion on my belt, which was the style at the time.
But anyway housewives (or house husbands) are still very much a thing and not just in the upper middle class thanks to the cost of daycare. Especially infant care, it was actually more expensive to go to work and pay childcare than stay home and that was almost a decade ago, its worse now.
The starting gun has been sounded for the zombie apocalypse.
Good grief. Check all the share buyback vendors. Executives, friends, and family. As classic a method of privileged thievery as any US government has ever kept legal.
What do I do with all these 20% off coupons?
Rule 10b-18, the rule proposed in 1982, gives executives total power (and a blank check) to determine their own incentive-based compensations…..couple this with stock buy backs and stock options for the board members and executives, and you have a cauldron of potential manipulations for immediate reward.
About 30 yrs ago, stock buybacks were not allowed. Perhaps that was incorrect. But there should be some consideration, some limits to when a company buys back its shares…..a Debt to equity ceiling. perhaps.
American Airlines bought back their own shares, at one point, when they had $19 billion in debt. Then there was the Hertz fiasco.
If indeed shareholders own the company, then the decision to buy back shares should be, at least, partly their decision. After all, this is their money, and share buybacks are out of the fundamental scope of the business itself. Financial hocus pocus.
>What do I do with all these 20% off coupons?
Can they be applied to buying BBBY? ;-)
This is absolutely hilarious to me since I would never buy anything in BB&B without the most recent USPS delivered discount coupon. Obviously, everything was overpriced 20%h
When large corporations are planning to do a big share buyback, they never say they are doing “buybacks.” Instead, they use the following line of bullspit:
“We are returning money to our shareholders.”
Since we’re talking whopping euphemisms, I would say that is the corporate version of rapid planned disassembly.
(Notice I said planned, not unplanned. Although with SpaceX, there obviously had to be some advance planned or they wouldn’t have been ready to do the “unplanned” activity.)
Well, since they are actually returning money to their shareholders, what would you call it?
If you are unhappy with insiders holding too many shares…complain about that specifically.
Providing other shareholders with a return on their investment (by dividends, buybacks, whatever…is sort of the entire point).
I’ll buy the shortsightedness/mkt manipulation arguments as well…but then complain about *those* specifically too.
Otherwise, ending buybacks will likely just result in the exact same sums of money being squandered *inside* the company.
Which really doesn’t seem like a triumph.
It is at least worth looking at *who* sold shares into the buyback operations – if insiders made up some astronomical percentage, then there may be a lawsuit there.
Otherwise (if the buybacks weren’t explicitly or implicitly targeted) then legal liability is a real stretch.
Looking at Wolf’s chart, revenues didn’t really start to hit the crapper until 2018 (net income?) which is well after a lot of the buybacks occurred.
Insiders may have seen the writing on the wall well before 2018 and acted (via lobotomized buybacks) to prop up every shareholders price…but the line between really bad business judgment (“we can turn this around if we can just stabilize share price!!…and do nothing else…”) and illegality (“Loot loot loot”) can get hazy. The meme manipulations (also worth investigating insiders on this) does push the needle to the loot side…but I don’t know how much evidence against insiders there is.
You can hate on buybacks, but the kind of dopey management that can incinerate $5 billion (invented number) is fully capable of incinerating $10 billion (sans buybacks benefitting some shareholders) almost as easily. I’m not sure that the latter instance is really better than the former.
Look at the G, which essentially controls God’s own checkbook.
Does anybody on this continent believe that the G is better run fiscally now, vs. many, many, many times in the far distant past – when the G’s resources were much more constrained.
Funding incinerator-types tends to just get you more incineration.
The buybacks may have sealed the fate of the company, but so would solid gold CEO toilets and company paid mass luxury weddings in foreign resorts…at least some non-insiders (apparently) benefited from the buybacks.
Share buybacks should be made illegal. If your company has extra money, issue it as a dividend or re-invest it in the company somehow without trying to directly manipulate the stock price.
Agreed. Just criminal.
The concept, to align shareholder rewards with insider rewards, was abused the moment it was thought of. Some aligning of interests does not erase glaring conflicts, such as insiders’ interest in short-term cashing-out versus shareholders’ interest in longer term value. This is a perfect illustration.
I don’t know what the technical IRR is for every bought-back share, but would seem to be the marginal increase in stock price plus any dividends avoided in the future? Seems likely to be a number well under 5% for most companies. Not a thrilling vote of confidence in one’s business model.
Buffet seems very disciplined on capital allocation. He seems to be buying his stock at about 6% hurdle rate. That was when rates were very low. Now that rates are 5% I would expect that he will bump his hurdle rate up.
Berkshire has so much cash parked in t-bills that the difference between 0% and 5% is about $6 billion per year. The quick runup in rates should be helpful to berkshire and companies like them that have lots of cash and borrowed using long term debt. The cash is paying more than the interest on long term debt.
I remember when companies had hurdle rates. Everybody seems to have forgotten the meaning of that in the world of zirp. At my bank, business ideas had to hurdle 7%. The economy will be in better shape after we get back to that for 10 years.
I was working for very small capital constrained company in the early 80’s where inventory cost was considered 18% and new products had to have a one year payback.
Our manufacturing facilities were a leaky old former tobacco storage building and people were working for just over minimum wage. Our gross margins were really good because the founder had patented a unique method to make fiberglass pressure vessels.
$11.6 billion on share buybacks … You have to be an arsonist to burn that much capital, or an idiot, or an accountant with a death wish and a coke habit. $11,600,000,000.00 is not chump change. Zelensky would have trouble burning that in a month.
The only thing worse is chapter 11, this is where they bury the above and say give us another chance.
$11.6 billion in share buybacks may be fine if you’re a company like Apple with $50 billion in cash and $120 billion a year in profits.
Not when you’re a struggling brick and mortar retailer.
Most of the cash is borrowed money
The last I heard for 2023, Chevron is buying back shares at $75 billion this year, Meta $40 billion.
The beat goes on.
At some point they refused to sell “My Pillow” products.
Fortunate for “My Pillow”.
…prolly couldn’t pay ’em, anyway, so why not get some free pr out of the situation?
may we all find a better day.
So out of the $11 Billion in share buybacks, how much was related to executive compensation via stock option grants?
On an unrelated note, CNBC had a sub-headline today on Coca Cola’s earnings “beat,” that “The company has been raising prices on its drinks to mitigate the impact of inflation.”
Who writes this crap? Coca Cola is not raising prices to “mitigate the impact of inflation.”
It’s raising of prices IS inflation.
Thanks to their absurd price increases, the last 12 pack of Coke or Coke Zero purchased in my house was before Christmas.
Me too. Out of principle I will no longer buy soda.
The pre-2020 prices were usually $2.29 per 2 liter, which was high, but the grocery stores frequently had buy one get one free sales or sales like $4 for 4 or things like that
Then the “base price” went to $2.59, then $2.79, then $3.09, then $3.29, and now is $3.59. So even at buy one get one, it’s still $1.80 a 2 liter, which is more than I’m willing to pay.
Count me in the buyer’s strike column.
I used to occasionally take advantage of McDonald’s “$1 any size soft drink.” Last time I went, I believe the price was now $1.99 which is a 99% price increase. I cannot believe the one down the road from me has a line of cars around the building all day. The food there is now a level of low quality I wouldn’t have thought was possible a few years ago and the prices are absolutely absurd.
I noticed the McDonald’s thing too. However, to be fair, the $1.99 was their “normal” price a few years ago. The $1 any size was always presented as a special, so maybe they just ended it earlier. Who knows?
But I’m with you. McDonald’s was never great quality, but it used to be cheap. Now a meal there is a minimum $9. I’d rather get something better.
A&W Root beer
McDonald’s has senior pricing in many but not all restaurants. You can get a $1 small coffee or soda.
One perk that is still available.
Just to put the degradation of USD into some sort of perspective:
Mom took us, 5 kids, to those brand new including new golden arches,,, and when we had filled our bellies with burgers and fries, it was about $6 for the six of us…
Surely we can at least HOPE THE Mac has at least begun to figure this out…
OTOH, surely we can hope in spite of the very very clear evidence,,, that some day the PTB can figure out that if they continue to screw the working folks who actually make or repair things will NOT just ‘[‘stand by”} while those folks who actually DO NOT CONTRIBUTE ”’ KILL” all, repeat ALL reasonable relations between capitol and labor…
To think or do otherwise is clearly going to distress ALL societies, etc., even more than today.
The McDonald’s situation isn’t all due to inflation.
The cheeseburger of today is priced around the same as the original 19 cent cheeseburger of 1955 taking into account inflation, but the quality difference between the 1955 burger and the 2023 burger is absurd. In 1955, the burger was almost a meal into itself, while today, a McD cheeseburger is a greasy disgusting flattened pile of manufactured swill.
McD released the 1955 burger in Europe a few years ago for a short time, based on the original recipe. It was a big juicy sandwich, very filling by itself. Ran the numbers and they were charging close to $7 for the sandwich in today’s dollars.
You could reasonably conclude that inflation only counts for 19 cents to $2. Corporate “optimization” accounts for the $2 to $7 jump. You still only pay $2 for the cheeseburger, but you receive much much less.
I would gladly pay $2 for a 1955 burger all day long. And it’s easy to see why McD became such a huge success. Why people are still lining up around the block to buy their products after such a tremendous reduction in quality blows my mind.
In the late 90s, it was common for vending machines in my area to sell 12oz cans for $0.50 and 20oz bottles for $1.00.
Now the vending machine at my office sells 12oz cans for $1.50 each – triple the price.
> McD released the 1955 burger in Europe a few years ago for a short time
You know what they call a Quarter Pounder with Cheese in Paris?
They don’t call it a Quarter Pounder with Cheese?
No, man, they got the metric system there, they wouldn’t know what the f**k a Quarter Pounder is
Me also,plus coffee might be next
Yes, coffee has gone through the roof. I will be cutting way back out of principle. Plus, it makes sense to drop unhealthy items from the list.
I have a feeling snack foods, coffee, ice cream, etc. are going to struggle during the next recession.
Time to short Starbucks?
Coffee inflation switched me off of Dunkins and onto brewing at home. Now I buy beans @ Costco and my cost-per-cup is a fraction of what it used to be.
It’s either high fructose corn syrup water, or chemical water. The HFCS damages your liver and makes you diabetic. The artificial sweeteners are nerve toxins. I’ve switched to ice water or tea with a squirt of lemon juice. Much better and better for your health.
It’s simply greed and gross price gouging.
No the expansion of the money supply is inflation. The resulting lack of purchasing power due to dilution of the currency causes prices to rise.
I disagree. Gov & Fed dropped too much money. This increases prices on nearly all inputs. It forces companies to raise prices to maintain margin. Only some companies can push the prices through and make them stick.
Coke has built a distribution network and brands all over the world over 100 years that people are evidently paying a little more for without impacting sales.
If someone drank a case of coke a week and now buys a case a month instead, with the price increases revenue might be the same, but their die hard customer isn’t so die hard anymore. Then there is me, who doesn’t even go down that aisle anymore. Same thing with the breakfast cereal and chip aisles, overpriced junk that I’m better off not even seeing. I am healthier and spend less money, win win for me, lose lose for Coke and Pepsi (who makes all the chips) who not only don’t get my money, but I now actively despise them.
That’s emblematic of the economy as a whole. Everyone, from Coca Cola, to Disney, to the car manufacturers are deciding to make all of their profit by selling to the top 10%, at higher margins.
It might be good business in the short term, but it’s destructive to society as a whole.
Is Buffett the only sane investor left,the rules need changed .It’s so corrupt .
No. There are other sane investors.
Most decide to fly ‘under the radar’ so to speak.
My guess is that most investors, like most people, just want to be left alone to do their thing.
One thing is fundamental. t-bills being the highest yielding point on the curve isn’t going to last forever.
From a consumer standpoint a cop of coffee at home does not seem to me to be extravagant. Just my humble opinion. Also in moderation a flavored drink of soda also brings joy to many though I don’t drink them often. My last purchase of 12 oz cans of Diet Coke was about 25 cents a can. When I was a kid that cost was 10 cents a can then at school the cost went to 25 cents from vending machine. 1972.
BS you speaking of at home coffee reminds me of a house teardown in mid fifties after the coffee shortage of WWII. When we reached an interior wall it was stacked with 1 lb cans from floor to ceiling. Wages then were about fifty cent an hour. The same for VVN and the golden aches of Mickey Ds with my first visit. Hamburgers were 11 cents with nickel drinks. A buddy and I could get lunch for less than fifty cents each. Ah the good old days of yore!
Waste and incineration is correct Wolf. The smart money got out of this stock a long time ago.
Bed Bath and Beyond did build a strong brand and had a viable business model – for a period. In their heyday, one of the BBB primary points of differentiation was a larger selection within their product categories. That was a workable idea – back when brick-and-mortar retailing was still the primary retail shopping method for many consumers.
E-commerce blew that competitive advantage into the dust. It was only a matter of time before consumers (including those with limited computer skills) figured out it was simpler and quicker to search for a given product online. And doing so generated awareness of other vendor options for buying that product, some of whom were flourishing while Bed Bath and Beyond was falling further behind in the digital shopping space as they continued to tweak their brick-and-mortar store model.
They rearranged the deck chairs on the Titanic repeatedly during that period. They should have paid attention to the bigger picture. Too late.
If CEO is too stupid,to set up an online division . Should have been fired long ago. But that would stop blatant theft of shareholder value.Smart money is always out first
What online business BB&B did have was pretty terrible. Poor tracking of online inventory (not 3rd party seller) so you’d buy something then get an email it was out of stock and you’re getting refunded in 5-7 business days. The site-to-store inventory keeping was somehow worse. Bought 4 dinner plates, got to the store only had 2 available, oopsie, here’s two and we’ll let you know when the others come in. First World problem to the max, yes, but Target is literally next door so…
To be fair, who expected the Federal Reserve to embark on a two-decade period of free money, suppressing interest rates to zero for many years?
This is what accelerated investment in money-losing startups and industry transformation. Lots of retailers probably thought they had more time to turn the ship. They didn’t expect the Federal Reserve would turn itself into a hedge fund, buying huge blocks of assets and suppressing normal market function.
This is absolutely true. Fed Reserve intentionally manipulating the markets to stack the deck to make sure it always wins.
BBB had extensive and compote online operations.
They had a pretty good ecommerce business. I bought some things on their website. On their website, you can buy everything they have at the store, but unlike the stores, they weren’t out of stuff until recently. They should have transitioned years ago to online in a more forceful way and shut down one store after another. On the website, they could have retained premium brands alongside lower-end brands. People trusted Bed Bath & Beyond – unlike some of the vendors on Amazon. But brick-and-mortar retailers are having a very hard time letting go of their brick-and-mortar business; they just cannot explain to themselves and to investors that this huge investment is now sunk cost and doomed and needs to be shed, come heck or high water.
Pure wisdom served up fresh daily.
More good news for commercial real estate (sarc).
Now that everyone is getting murdered on their neighbor’s front porch not only is it bad news for porch pirates but UPS drivers might be hesitant to deliver those new shower curtains.
The big problem for online retailers has been delivery for “ the last mile”. The increase in crime
will only exacerbate this problem
Crimes like delivery drivers getting shot by the homeowner if they arrive a day early or pull into the wrong driveway?
Actually, a bigger problem for online retailers is credit card fraud. Anyone can dispute a credit card charge from something they buy to get free product & defraud the retailer – much easier than stealing from a physical store or the delivery guy.
You might get a free bite or two, but I assume their algos will remember you.
The two great underpinnings of the bull market in the stock market were share buybacks and a bull market in bonds .
The bull market in bonds has ended .
Higher interest rates mean it will be much harder to finance zombie companies via stock secondaries . Banks such as SVB will not be able to finance such companies as lending standards revert back to rational levels .The result will be the disappearance of many of these companies.
Higher interest rates and lower future revenue growth will make future stock buybacks much less attractive
The present value of future cash flows will be lowered as the discount rate used is raised . This will especially impact those high P/E tech stocks , which dominate the S+P and Nasdaq.
The next decade will be a bloody one for stock market investors
Unless interest rates plummet the mismatch between dividend yields and certificate of deposit yields all but means the stock market has very limited upside. In any other decade the stock market would be obliterated with such a mismatch in yields. Everyone must be confident a deep recession will ensue in the near future.
So I guess the lesson is that if you are a corporate bond holder, regardless of the rating of the bond (because we know ratings are a joke), if the company starts doing buybacks, you best sell your bonds ASAP !!
The sad thing is, BBB had a last-minute buyer… but they left their 20% Off Coupon at home!
I disagree framing it as brick and mortar vs ecommerce. Bed Bath & Beyond was a retailer with no unique product line worth the effort of shopping there. Further, there has been an enormous growth of sellers direct from overseas on every online marketplace I know that have cheaper comparable products. Those who could afford to pay their premium price could pay marginally more for better alternatives.
In short, they lost the budget, middle, and upper market segments — sure death.
They were unique in being able to get a large swath of home goods in person. I personally like shopping in person, but I recognize that I am in the minority.
I also find the idea of UberEats and DoorDash distasteful, but again, I’m in the minority.
Retail grocery stores are probably next why not have warehouse stores ,order online ,pick up way cheaper and cut out middlemen.
That was Webvan back in the late 1990’s. They had a valuation of $5 billion at one point, but went bankrupt after burning thru $800 million in investors money.
Louis Borders was an interesting guy, I used to do his taxes. Webvan was just years ahead of its time, no one was ready to “give up” the privilege of going to the store, which I found weird.
Not to mention getting rid of all of the useless ‘clerks’ doing nothing of any value at grocery stores all around the country.
In what galaxy?
I haven’t been to a grocery store in years that hasn’t been visibly understaffed, with the existing skeleton crew harried if not outright overwhelmed.
SCBD – with any luck at all, in the near future they’ll be terminated and wind up pitching their tents on the streets near your domicile.
(…but that’s okay, keep on devaluing those who are
working, but not at jobs of your obviously-superior level…would advise thinking a bit about asking them to soldier for (hopefully with) you when, not if, that age-old necessity arises…).
may we all find a better day.
What makes them useless?
It’s clearly hard & mostly thankless turn-n-burn work, but I value the fact that my neighbors show up to do it. There oughta be tip jars.
Disagree. Even the most die-hard online shoppers I know still prefer to buy groceries in person. Those aren’t going anywhere.
The cashiers, however, will be replaced with self-checkouts.
I buy nearly all of my groceries from Amazon/Amazon Fresh where there is far more choice and great efficiency.
I remember when Bush I was making campaign appearances amongst the great unwashed and was caught flummoxed by the product scanners.
To me, choice is about picking out the produce I want, and getting recipe ideas by walking down the aisles. It’s also about not having to be home during a particular “window.”
To each their own, I guess.
I refuse to use self-checkout except. Vote with your wallet/feet. I cast my ballot for sentience, no matter how bereft of manner or decorum they might be.
Walmart already doing that, pick up at store or home delivery. I think that model will get ingrained, as my cousin who had little ones and my ex- who has ours, appreciates not having to get a toddler or two in and out of a vehicle. Once these habits establish, I do not see people letting go. Let the employee shop and load for you. If that does come to pass, I expect more consolidation and bigger chains to get bigger, with smaller guys getting squeezed out. Just my two cents.
“Bed Bath & Beyond was a retailer with no unique product line worth the effort of shopping there.”
All big box retailers are that way. They’re retailing other companies’ products by definition. Some have their own store brands with lower prices, in addition to the brand-name merchandise. Have a look on Amazon and see what it sells. Or look into a Walmart store.
BBBY had a good ecommerce operation. They could have done very well with it if they had accepted 10 years ago that they need to phase out of their brick-and-mortar stores. There was no reason to go to a store, you could get everything on their website, delivered to your house. And the website wasn’t out of stuff, unlike the stores. If you wanted eight bowls of a specific type, you’d go to the store, and they’d have three. If you go their website, you buy all eight in two minutes, shipped to your house, and if one of them breaks during shipping, they’ll ship you a new one.
It’s not obvious yet, but delivering to houses is more fragile than to stores. Once neighborhoods become unsafe and the delivery services refuse to serve them, and infrastructure starts to break down, there won’t be any stores left for people to go to. It’s the equivalent of just in time supply chains. We’re going to learn very soon.
Danielle – excellent observation. Mission-critical redundant systems are there for a reason. (…of course, our contemporary quest for 100pc efficiency dovetails nicely with our seeming propensity to gamble with the near-entirety of society’s eggs placed in one basket…).
may we all find a better day.
I think that is why you have the lock boxes with Amazon, Home Depot, etc. I lived in a couple of higher crime areas, and any package left unguarded was stolen. So perhaps we will see more and more lockers to aid in theft avoidance, or more Ring cams spying on neighborhoods.
They also did not allow in store returns for items bought online. The whole reason i use retailers like TGT and Dicks is so i can buy online and return to the store. I needed to return something and they gave me a prepaid FedEx shipping label and the FedEx place where i dropped it off was literally right across the street from the actual store. So wasteful and inefficient
Supplier credit managers must have been cutting them off for a long time. Their ability to retain suppliers, the headwaters of their revenue stream, must have been in peril.
Anyway, I loved the chart headings… “Bed Bloodbath and Beyond”. Yet another Wolf classic. Thanks, just love it!!
I wonder how many people actually saw that. It’s kind of camouflaged.
Wolf – agree with CGB and thanking you again for your constant and superb turns of anecdote over the years…
may we all find a better day.
Sears, Fast Eddie, Cramers bud, got all the real estate. They ran the pumpnDump up to $184 a share. Then whoosh to zero. Getting the Lands End brand wasn’t a bad move but nowhere near enough. Way back I liked the place and knew people that worked there. Liked shopping at BBB also, very pleasant layout. Now I’m all in Amazon. Went to a golf store last week for head covers, they didn’t have any after the $400 per club I shelled out. Click click on my porch head covers. Like my rural bretheran I’ll save the truck gas money, Still like dining out a few times,
Good riddance, that’s what they get for not allowing me to take a bath and have a nap.
Thanks for adding up all of that money spent on share buybacks. Just shocking.
To Our Valued Customers:
Earlier today, Bed Bath & Beyond Inc. filed for voluntary Chapter 11 protection.
We appreciate that our customers have trusted us through the most important milestones in their lives – from going to college, to getting married, to settling into a new home, to having a baby – and we wanted to reach out to you to explain what this means.
Our stores are open and serving customers. However, we have initiated a process to wind down operations.
What This Means for Our Customers
We wanted to make you aware that several of our programs and policies may be changing soon. As of today:
• We expect to process returns and exchanges in accordance with our usual policies until May 24, 2023, for items purchased prior to April 23, 2023
• We expect Gift Cards, Gift Certificates, and Loyalty Certificates will be accepted through May 8, 2023
• We will no longer accept coupons or Welcome Rewards+ discounts beginning April 26, 2023
• We expect all in-stock orders placed online both prior and after our bankruptcy filing to be fulfilled at this time
For Frequently Asked Questions (FAQs) and additional information, please visit …. Stakeholders with questions can email … or call a…
Thank you for your loyalty and support.
Bed Bath & Beyond | buybuy BABY
My God, what must they have paid their “consultants” to write this piece of meaningless garbage. Here is the consultancy fee free, shortened version:
Dear no longer Customers, you are as useless to us now as the sky above a pilot, or the runway behind him.
All the best, the BBB Liquidation team.
BBBY was always nothing more than a reseller. Did they ever have anything unique or proprietary. Other than having hundreds of stores and an endless supply of 20% coupons what was the draw🤡😜🤡😜🤡😜
Just liked going to the mall, go into BBBY hang a left, check out towels, grab a new pillow. A Sears clerk saved my skin by having dress pants that matched my suitcoat perfectly headed for a wedding. It’s just nice to get that kind of service when you need it. Honestly I miss brick and morter but heck it’s gone.
What else would you expect them or want them to be? They were a BIG BOX RETAILER and that is exactly what they did both in-store and on-line.
My UPS Driver arrives at 7PM. I turn on the light and meet Driver. The Driver always says your one of a kind Buddy ! Cuddletown used for 25 years. Order on line, rebates by check, fast delivery and quality sheets.
My old UPS driver would always stop for a chat, but he was an old timer getting ready for retirement. His replacement has no time, they are tracked and monitored and get flagged if they stay in a single area too long.
BBB was a great catalog shopping store. Go there, look at the merchandise, if you found something you like, order it online – from somewhere else.
The thing that drove me further into online shopping is that many items are not in stock when you go to purchase them at a bricks n mortar store. Things as stupid as bar soap for sensitive skin (my wife needs it)…. visited 4 drug stores and no one had it. Wasted an hour and several dollars in gas. Ordered it online and only wasted some electrons…. and the best part was that it was cheaper online.
We don’t have many porch pirates out here….. costs too much in gas to drive all this way.
Funny. We rurals have other means of defence. If you make it up the driveway without falling and breaking your legs. And regular bar soap stings your eyes, I order online also.
(“Return Value to Shareholders” LOL)
Add this to the list of Wolf’s all-time one liners!
Virtually every corporation in America is in the same boat with the exception of a few gold stocks and bond funds. The summer of 1929 valuations makes any buybacks just throwing money into the fireplace.
DM: These six Walmart stores have closed down for good this weekend: Retail giant shuts 20 ‘underperforming’ brick and mortar locations – so has your city been affected?
Six Walmart stores closed their doors at the weekend.
The Amazonation of America. When history looks back it will find the Amazon monopoly as the cause of the death of retail and the economy. Certain tech “progress” by monopolies should not be allowed imho as the results are far more destructive than the benefits. With inflation, who has time to waste on mall shopping? Yet if Amazon drives every retailer out of business, what is left of America? The case study for wealth transfer is what these monopolies give: google, amazon, etc. Talk about loss of freedom and living standards. You either own the robots(top 0.01%), or you succumb to them and they own you. Hello AI. Big tech will be managing your every move, wish and thought. Oh..they already do
Not So Fast steve:
Lived for several decades up until last few years in a locale where several local based retail places beat both WM and ”the amazing digital/web based place” consistently and with MUCH better customer service.
Just to say, it can be done.
Not to say “it” will be done.
One place was ”union of employee owners”,,, other place was sole proprietor,,, both with wait in line for your turn personal service.
@VintageVNvet, I agree with you. There is a place in Thousand Oaks, CA like that. It is called “Miracle Appliance Parts”. This is a one man operation. Little shop is stuffed to the gills. There is often a line of people in front of the building waiting to ask questions and buy parts. The guy running the place knows everything about home appliances (washers, dryers, dishwashers, refrigerators etc).
In late October the bearings on my furnace’s fan motor were making noise when the fan kicked into high speed, out of the two speeds it runs on. My 2005 Payne nat. gas forced air furnace was telling me it needed help.
There’s an appliance supply store in St Paul, run by an experienced dude who has, and pretty much knows, everything.
A few photos of the opened up furnace and fan on my phone, a call in to his store, and bingo. Part in hand for $560. You see, the fan motor’s bearings can’t be swapped out, and the whole assembly is fairly complex and needs to be changed over. It took about 40 minutes to do it with help from a neighbor who’s done similar work before.
Bottom line: “Thank you Tom & Dey Distributing!”
Winter in Minneapolis requires a working furnace, eh? Old-time Brick ‘n Mortar to the rescue.
God bless his soul. I’m an old airplane guy, we’ll fix your stuff. Dumb old craft people built the country. Nicest ones I have met were native basket weavers, that is a true skill. And artists too. Always loved hands working. Hope younger people take up a skill.
So-called ‘personal service’ is highly inefficient and obsolete when it relies on a single person during business hours, and 24 hour service over the internet has superseded it with far better service from many people and is now the indisputable norm.
It seems to me that a lot of the retail carnage that could happen has already happened, so I wouldn’t call it the end of the country just yet. We’ll lose some more brick and mortar, but many retailers that have survived are still around because they did a decent job of adapting to the new order. Amazon and the like actually aren’t very competitive in certain retail segments where a high level of personalization is desired.
For example, maybe a person of exceptionally boring fashion sense could get by ordering the same clothes of known fitment over and over again. But if you want to change up your outfits at all, nothing beats being able to go try clothes on at a brick & morter store. Or if you want a premium bicycle that is adjusted specifically to your liking, a good independent local bike shop is going to offer you what Amazon can’t. Not to mention the massive presence of counterfeit items that plagues online ordering at higher price points. Online vendors will continue having a hard time competing in luxury retail. Also, site-to-store purchases offer straightforward return processes that the online-only retailers haven’t really figured out yet, and brick and mortar retailers can leverage their logistics advantages for large items bought site-to-store. Online returns can still be a real pain in the rear, especially for large items.
Sure, online retail has changed the game profoundly, but there’s no reason it can’t co-exist with brick and mortar stores. Best Buy is a recognizable brand and the core business model would have been fine with a few tweeks. Instead, the company is dying because the execs made terrible decisions and went into heavy debt for buybacks rather than investing in adapting to the new world of retail.
There’s also the cost in time and frustration of ordering something online, receiving it, and finding that it is nothing like the photo in appearance or durability. Now you have to return it and go back online and try to find something else that looks like it may be close to what you were looking for. And that will take time, and whatever you order will take more time to get to you, and may also turn out not to be as described.
This happens to me constantly and in each case, I wish I had been able to invest a few hours into a brick and mortar shopping trip where I could have inspected things before buying them.
(And this is all before accounting for the stupendous waste in transportation cost and packaging for items being bought and immediately returned, over and over and over and over and over and over and over and over–because of course we feel that cost more as a society than I do as an individual buying poorly made crap and returning it at an Amazon Hub for “free.”)
Yeah this online stuff will put me in an early grave Pea Sea. I should not be on a blog. Wheels up and punching out but thanks peeps, like the heck out of all of you. Will still read the Wolf, it’s friggin brilliant. Shop local if you can but big box emloyees work there tushes off. Gotta hug them too.
Well at least it bought upper management time to make grandkid money with the buybacks.
PLEASE…let’s not forget…….BLOOD has been spilt in the wall street story of this company……it bears investigation, which……(because…Wall Street….) won’t happen. Ho hum. When is the kim kardashian rerun on?
BBBY has been a zombie retailer for a long, long time. No reason for them to exist anymore — they sell commodities, which anyone can buy cheaper from pure e-commerce companies with a lower cost structure. The fact that BBBY never attempted to make this transition speaks to their incompetent management. Good riddance.
Bled, bath & no beyond
Share buy-backs, other than maybe for employee stock options, should be illegal. Didn’t they used to be illegal? So much wealth incinerated, as Wolf says, to no good end. The purpose of the stock market is to raise funds for capital investment and legitimate company needs, not to play eff’ing games to try and goose the price of the stock. When will someone step up and correct this situation?
Stop blaming Online !!!
Geese Dollar stores are on fire it . Ross and its peers don’t seem to have any issue with online. Its the Death of the Middle. That’s the elephant in the room.
I was looking for an SUV and was taken back at the amount of so called ( Subcompack SUV) First i though it was just that consumers wanted them ; but then, I realized it was the only way for people to afford an SUV. The Auto manufactures didn’t want to insult the consumers by saying that you are too broke to afford a real SUV so they came up with the game of slapping the term ( SUV ) on a product to make the consumer feel like they can actually afford an SUV. Back in the old days we called them ‘ Hatch backs’ now they just raise a hatch back a few inches and call it an SUV.
“Ross and its peers don’t seem to have any issue with online.”
Ross closed its store in our neighborhood a while ago. And the store is still empty. As are the other two big stores in that building. One was a World Market and the other was Orchard’s Hardware.
Revenues of Ross Stores was down slightly last year from the year before, despite inflation.
Share buy backs are the modern scapegoats for all corporate ills. Like junk bonds in the 1980s. Nothing inherently good or bad about them. They are merely the flip side of issuing equity. They can be used deceptively or to pursue dumb corporate strategy or can be used to efficiently dispose of excess cash flow. Perhaps everyone would prefer that corporations use excess cash to buy unrelated businesses like in the 1960s conglomerate era?
Share buy-backs accomplish nothing good. Financial engineering that has been the death or near death to too many corporations. Explain to us what good they accomplish. We’ll wait.
Your snarky tone indicates that you are unreceptive to logic.
But it should be clear from the BBBY case that the $11.6 billion in buybacks was money that was not wasted trying to save a dying company.
Share buybacks are an admission by management that capital is best deployed outside the company. Should they instead waste capital by jnvesting at below market returns inside the company?
Shareholders in aggregate got what they deserved. They got wiped out.
I actually like distortions created by artificial pump mechanisms like stock buybacks. If you don’t fall for the hype and stay away from these companies, you can easily beat the market over time. Companies that waste money on buybacks often run into deep trouble.
That sounds like an excellent approach.
You’re ignoring the perverse incentives provided by the ZIRP era. Engaging in buybacks is often coupled with expanding corporate debt, not merely disposing of excess cash flow. As Wolf’s article states, BBB issued 30-year bonds in 2014, the same year it did share buybacks of $2 billion. With ZIRP it made short-term sense for many companies to manipulate their stock prices using leverage. However, when the business environment turns against a company, the debt remains. At that point bankruptcy is a real possibility.
If interest rates normalize at higher levels, the most egregious buyback practices will probably cease to exist.
The $11.6 billion in share buy-backs wasn’t wasted. The people who sold the shares got the money, didn’t they? I would consider them satisfied share-holders.
The smart ones…
I visited WallStreetBets and a couple other stonk forums as soon as I heard the news.
Some people were angry with the world, some people were crying with a smile on their face, and some were undaunted, arguing that this is a great opportunity to load up on more shares.
ZIRP junkies going through withdrawal.
Funny free money and the feelings of cleverness, like illicit drugs, shut off and also stimulate the brain in weird ways, that can be hard to erase.
Was BB&B owned by private equity?
Hard to imagine these would drive it into bankruptcy without extracting value from the carcass.
Only those who worry about overall health of the economy fret about buybacks.
The American oligarchs who own private equity companies, think those are chumps.
E-commerce is driven by females not males.
I see it all the time….I don’t care what it is, I need a package delivered to my house every single day.
BBY simply could not compete with the one click, no hassle, package delivered to my personal doorstep solution.
Americans cannot afford a premium store like Bed Bath and Beyond, so it’s not surprising they are going bankrupt. Americans will switch over to Walmart and Target.
I am not sure what is supposedly so “premium” about BB&Y. The few times that I was ever in there it didn’t seem to me that anything was too different than I could get at Walmart/Target/Mattress store.
LOL. Americans buy on the internet whatever they want:
I don’t have a problem with HEALTHY companies doing share buybacks. it is either that or issue dividends (which are taxable). But this company hasn’t been healthy in about a decade… so the buybacks from 2014 were unnecessary/inappropriate/uncalled for/wrong… help me out here I am am having a hard time coming up with the right word.
And the buybacks in 2021 was just a looting of the company.
The share buyback might have delayed bankruptcy, but it would not stop it. Clearly nobody wanted to buy the company. If it were simply a matter of funding, it would have been provided. But why let the lack of economic and accounting knowledge stop someone from publishing their chosen narrative?
I prefer seeing and touching expensive purchases versus buying online and trusting that I will like the product.
If Congress wasn’t in the hip pocket of the mega banks and mega corps, they would make share buybacks illegal again. Share buybacks generally work well in a bull market, but not so much in bear markets. In bear markets, share buybacks are a complete waste of money.
We don’t always know exactly how some of these companies got to the brink desolation but what we do know for sure once that meme-stock “Diamond Hands” crowd sinks collective their talons into the finances of your company via equities…. that goose is cooked.
Betcha the shareholders that made money under the buybacks are not the same shareholders that lose money on the bankruptcy.
Sounds more like a poker game with secret teams pitted against pigeons than a market. Come to think of it – that’s our government.
They pumped expectations so that they can get out of bad business. Then they likely also started to bet against it via proxy actors. That is what organized crime does.