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Bed Bath and Beyond files for bankruptcy

nytimes.com

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Re: Bed Bath and Beyond files for bankruptcy

#261

Post by [deleted] »

spaceman_2020 wrote: post #118
neurobama wrote: post #52

Earlier quoted context omitted.

The whole stock market in 2023 makes no sense to me, not just Bed Bath and Beyond. So many companies no longer pay dividends. So many classes of stock are now non-voting shares. Common stock shareholders usually get nothing if a company goes bankrupt and liquidates. So if I don't get dividends, can't vote, and am not entitled to a share of the company's assets, what is the actual value in owning stock? Do I just wait…

Everything has been fundamentally detached from reality, from stocks to housing. Houses can sit empty without tenants for years but they’ll only go up. Companies can be unprofitable for literal decades but they’ll keep finding funding and buyers. Commercial properties can bleed tenant but the prices will only be up. In a world of shrinking growth , stalling productivity, and dying demographics, the market behaves lik…

[deleted]

Re: Bed Bath and Beyond files for bankruptcy

#262

Post by bryanlarsen »

Xeoncross wrote: post #257
spaceman_2020 wrote: post #118

Earlier quoted context omitted.

Everything has been fundamentally detached from reality, from stocks to housing. Houses can sit empty without tenants for years but they’ll only go up. Companies can be unprofitable for literal decades but they’ll keep finding funding and buyers. Commercial properties can bleed tenant but the prices will only be up. In a world of shrinking growth , stalling productivity, and dying demographics, the market behaves lik…

The market is acting very rationally. If you print trillions of dollars out of thin air every year, there is more money and more demand. So everything else goes up in price. Everything still costs the same relative to the amount of US dollars that exist. Wages just aren't keeping up with printing press.

Money printing (aka QE) stopped 13 months ago and money shredding (aka QT) started 10 months ago.

Re: Bed Bath and Beyond files for bankruptcy

#263

Post by pjmorris »

crooked-v wrote: post #135
spaceman_2020 wrote: post #130

Earlier quoted context omitted.

I don’t know, but it’s increasingly frustrating as an average person. Apartments around me keep appreciating in value every year, rents keep going up astronomically even when the houses stay empty. My income went up, but housing in my area went up nearly 2x. I’m being priced out of areas I’ve lived in forever. I feel like a social contract has been violated. Everything, from products to housing seems to be targeted a…

Housing prices keep going up in the US because, fundamentally, there's not enough housing and hasn't been enough housing built for decades [1]. In most big cities, this is a self-inflicted problem caused by bad zoning and by planning and permitting processes that can take years and add huge amounts to home prices. (This is a big part of the reason there's so much "luxury" housing; adding a superficial high-end gloss…

I just went and looked up 'San Francisco empty residences'... it's somewhere between 40,000 and 60,000 depending on where you look. I then looked up 'San Francisco homeless population'... somewhere around 8,000.

I am not convinced of the narrative that there isn't enough housing.

Re: Bed Bath and Beyond files for bankruptcy

#264

Post by wintogreen74 »

neurobama wrote: post #52
humanlion87 wrote: post #8

I find the whole situation fascinating. Bed Bath continued to sell hundreds of millions of shares while they were preparing for bankruptcy and retail investors (or meme stock investors) continued to buy them. I assume Bed Bath did all the paperwork that is necessary (like calling out risks, that the raised capital will go to creditors first, etc) for such a stock sale. But it is clear they were doing it out of bad-fa…

The whole stock market in 2023 makes no sense to me, not just Bed Bath and Beyond. So many companies no longer pay dividends. So many classes of stock are now non-voting shares. Common stock shareholders usually get nothing if a company goes bankrupt and liquidates. So if I don't get dividends, can't vote, and am not entitled to a share of the company's assets, what is the actual value in owning stock? Do I just wait…

You can buy all the dirty, old fashioned stocks that still pay dividends like oil & gas, banking, integrated grocery, even Microsoft - at least until the activist investors push them to fundamentally change their business models.

Re: Bed Bath and Beyond files for bankruptcy

#265

Post by dragontamer »

BaseballPhysics wrote: post #97
jandrese wrote: post #89

Earlier quoted context omitted.

Just because a risky behavior works out sometimes doesn't make it any less risky.

I never said it wasn't risky. I'm saying it's unfair to assume it's proof someone is "financially illiterate", i.e. uneducated or stupid. Educated people can have different assessments of risk.

BBBY was publicly in default in December 2022 (and this was announced to the world in January 2023), and their plan to get out of it was to print hundreds-of-millions of shares and sell it to the APES to raise money a-la AMC.

As much as the APEs want to compare this even to Hertz... Hertz wasn't printing hundreds-of-millions of shares in its troubled time in 2020. (They tried to, but unlike today, a judge shut that attempt down).

----------

So on the question of "what if the apes just pump the stock up and everyone makes money?". The "financially literate" counter to that question is rather simple: how can the stock price go up if the board of directors is printing 600,000,000 new shares? (Note: BBBY only had 117-million shares in December).

If the stock price fails to go up, why would the apes keep investing? If the apes fail to invest, how does BBBY get out of its default with JP Morgan/Chase? And here we are today, with the formal bankruptcy being filed. It was an attempt (IMO, an immoral attempt) to get money, but it did raise ~$700 million from the apes. But that's not enough to rescue BBBY.

---------

Now this is where Hertz did well by the way, after the bankruptcy. If you really want to gamble "like people did with Hertz", today is the day, post-bankruptcy filing, that you start sinking your money into this stock. I don't recommend it though.

Re: Bed Bath and Beyond files for bankruptcy

#266

Post by boring_twenties »

itake wrote: post #64
neurobama wrote: post #52

Earlier quoted context omitted.

The whole stock market in 2023 makes no sense to me, not just Bed Bath and Beyond. So many companies no longer pay dividends. So many classes of stock are now non-voting shares. Common stock shareholders usually get nothing if a company goes bankrupt and liquidates. So if I don't get dividends, can't vote, and am not entitled to a share of the company's assets, what is the actual value in owning stock? Do I just wait…

My understanding is buybacks are better than dividends for tax purposes, because with dividends you pay income tax and buy packs you pay capital gains.

With qualified dividends, you pay the LTCG rate anyway. The problem is that dividends are taxed twice: the corp pays corporate income tax on that money before it's distributed

Re: Bed Bath and Beyond files for bankruptcy

#267

Post by yamtaddle »

Eumenes wrote: post #167
spaceman_2020 wrote: post #118

Earlier quoted context omitted.

Everything has been fundamentally detached from reality, from stocks to housing. Houses can sit empty without tenants for years but they’ll only go up. Companies can be unprofitable for literal decades but they’ll keep finding funding and buyers. Commercial properties can bleed tenant but the prices will only be up. In a world of shrinking growth , stalling productivity, and dying demographics, the market behaves lik…

Why would an empty house not go up in value? If anything, if its unused, it'll likely require less upkeep/repairs.

Didn't look at a lot of long-term vacant properties during & after the '08 crisis, I take it?

Modern houses aren't meant to survive in most climates, without heating and air conditioning. They grow mold from trapped humidity, and the finishes fall apart from expansion/contraction.

And this is assuming they were properly winterized before being abandoned, and that they don't suffer any damage that allows outright water infiltration (say, wind damage or a tree branch falling and letting water in through the roof or siding) or vandalism.

I've seen some that were starting to have serious problems less than a year after being abandoned. Thousands of dollars of damage already accrued.

[EDIT] Now, keep the heating and AC running at minimal levels and have someone check in on it every few months, then fix any problems that are developing, and that's another matter—but that costs money, and isn't something I've ever seen done with long-term-vacant institution-owned properties.

Re: Bed Bath and Beyond files for bankruptcy

#268

Post by wintogreen74 »

FredPret wrote: post #213
spaceman_2020 wrote: post #118

Earlier quoted context omitted.

Everything has been fundamentally detached from reality, from stocks to housing. Houses can sit empty without tenants for years but they’ll only go up. Companies can be unprofitable for literal decades but they’ll keep finding funding and buyers. Commercial properties can bleed tenant but the prices will only be up. In a world of shrinking growth , stalling productivity, and dying demographics, the market behaves lik…

> don’t follow any rationality anymore Anymore? When have markets ever been rational? Markets only line up with reality over the long term. You can point to any instant, and even any decade in time, and point major inaccuracies in the public's collective financial thinking. > Houses can sit empty without tenants for years but they’ll only go up. Do you have stats for how much of a problem this is? The problem seems t…

>> You can point to any instant, and even any decade in time, and point major inaccuracies in the public's collective financial thinking.

Examples: today Halliburton and GE Health both posted numbers that be the market and saw big drops in value, while Spotify missed big time and swung to a loss, yet saw their stock price go up. Everybody points to potential but totally dismisses today's reality.

Re: Bed Bath and Beyond files for bankruptcy

#269

Post by Gunnerhead »

jandrese wrote: post #90
Hasz wrote: post #46

Earlier quoted context omitted.

IMO, Costco does a good job of balancing quality and price.

But terrible at offering selection. If you don't like the color, well, tough because that's the one they stock. Maybe if you're lucky they'll have a second color or style for sale.

Or: You saw it last week? We’ll, too bad. We have a completely new set for sale today.

I say this as a huge Costco shopper and fan. Serendipity and spontaneity is the name of the game at Costco.

Re: Bed Bath and Beyond files for bankruptcy

#270

Post by bumby »

midwesternerer wrote: post #218
bumby wrote: post #215

Earlier quoted context omitted.

> The only real answer is to build more I don't think this kind of dichotomous thinking generally holds with complicated real-world problems. They are almost always a confluence of multiple "answers". E.g., yes, housing supply is probably part of the solution. But so may be integrating policies that disincentivize viewing something necessary (like housing) as an investment asset.

I'm not sure what you are arguing with here. Housing is an attractive investment because the supply is constrained which drives up the price.

I'm not 'arguing', I'm trying to add some nuance.

I'm saying housing is a unique form of 'investment' for a variety of reasons. For one, it's an 'investment' that most people can't exit from because you have to live somewhere. It's also an investment that is relatively illiquid. It's also an investment where the majority of Americans wealth (about 70%, I believe) is tied up in, from which they borrow against. It's also a necessity.

These all combine to create an incentive for a bunch of wonky policies that can have negative societal consequences, like artificially inflating the price of housing. So, yes, the fact that it is considered a good financial investment is also part of the reason it creates societal problems.

It would be like artificially constraining the production of food so that those who have 'investments' in food companies can make more profit. Obviously good for the investors, probably less so with society as a whole. Now add a bunch of constraints like the friction of buying/selling those assets etc. and the problem gets worse.

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