After the whole fiasco during august, BBBY has gone from spotlight. A young wallstreet bet user made 110 Million USD from a 25 million USD investment.
Last year, after BBBY announced the share buyback program it backfired so much that, BBBY lost almost 90% of its value from its peak last year. Even the activist shareholder Ryan cohen got off the BBBY train. In a recent interview, Ryan explained how BBBY went from share buyback to almost filing for bankruptcy.
But the fundamentals of the company remained pretty much the same. If anything the wallstreet is missing an excellent opportunity here. Even though BBBY is struggling in its business, its core business remained the same for the last 20 years and will be. What actually happened was during the covid season the people wanted to renovate their houses. So they bought stuff from the retailer, increasing their sales and their share price. But after the fed’s interest rate hike the free money train has stopped with inflation hitting 7.7% average people stopped spending much on retail.
But is this the case?
According to consumer price index retail inflation only rose 1.1% from last year. that means the price of the retail products hasn’t increased compared to food and energy cost. And in this holiday season, we might see high retail spending volume by consumers.
According to the Finances online the spending volume during the holiday season up 50% from previous months. and people spend a lot in their home furnishing and home spending.
So BBBY might be out of favor from the wallstreet, but things might turn around pretty fast.