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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

#291

Post by XorNot »

DSingularity wrote: post #176
rcme wrote: post #128

Earlier quoted context omitted.

Is the market acting like infinite growth is baked in, or is inflation simply out of control? And I’m not talking about CPI over the last three years. Stocks have been insane over the last decade. Real estate has been insane over the last decade. Neither of which is measured by CPI. So yea… the market is pricing things like the Fed will keep printing money to prop up assets it explicitly ignores in its inflation calc…

It certainly feels like money is going to lose its value eventually. Everyone is becoming wealthy by just clicking buy. When people start using that money, what will happen? Markups from exceed demand — inflation.

Inflation of what though? Real estate is the only asset on the planet we can't just manufacture more of. iPhones, cars, clothes...all of that is disposable and near infinitely reproducible.

A person can't eat more then a very limited amount of food per day, regardless of their wealth.

So what's going to inflate?

Re: Bed Bath and Beyond files for bankruptcy

#292

Post by criddell »

dragontamer wrote: post #131
BaseballPhysics wrote: post #129

Earlier quoted context omitted.

> Believe it or not, investing is an activity that, under the correct circumstances, leads to the benefit of the investor, the company, and the economy in general. I personally seek this behavior that's beneficial to society in general That sounds very noble. Of course, the reality is the vast majority of people trading financial instruments do it for one reason: to enrich themselves (or, in this case, to entertain t…

> to enrich themselves Yes. Because the underlying 5% to 15% gains due to general economic growth is one of the most reliable ways at building wealth in this country. It provides a service to companies who need money today for their expansion (through the IPO and secondary-offerings mechanisms). It provides steady, long-term growth to investors looking for a place to park their money. Its not only good for the countr…

> It provides a service to companies who need money today for their expansion (through the IPO and secondary-offerings mechanisms)

I get that issuing stock is a way for companies to raise capital, but once it’s out there, how does a company benefit when I buy 100 of their shares from you? Is it different than the used record or book market?

Re: Bed Bath and Beyond files for bankruptcy

#293

Post by autokad »

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…

exactly. Most stocks are effectively over produced digital collectibles. a stock should only be worth the potential cash flows it gives you in the future. period.

'but I get a share of the assets if it goes bankrupt'. you mean nothing? share holders are last in line behind government, bond holders, other debt holders, preferred shares, and then maybe common stock.

people are in some sort of 'rage' mode in gambling on assets.

Re: Bed Bath and Beyond files for bankruptcy

#294

Post by dragontamer »

criddell wrote: post #292
dragontamer wrote: post #131

Earlier quoted context omitted.

> to enrich themselves Yes. Because the underlying 5% to 15% gains due to general economic growth is one of the most reliable ways at building wealth in this country. It provides a service to companies who need money today for their expansion (through the IPO and secondary-offerings mechanisms). It provides steady, long-term growth to investors looking for a place to park their money. Its not only good for the countr…

> It provides a service to companies who need money today for their expansion (through the IPO and secondary-offerings mechanisms) I get that issuing stock is a way for companies to raise capital, but once it’s out there, how does a company benefit when I buy 100 of their shares from you? Is it different than the used record or book market?

Each time someone buys a stock, the stock value rises (meaning the next secondary offering will be able to achieve more money raised with less shares issued).

The stock value rises because you didn't buy 100 shares from me per se. You bought the 100-cheapest shares on the market, which naturally raises the price.

----------

Lets say the market depth looks like the following:

* 5 shares available at $95.20

* 15 shares available at $95.21

* 30 shares available at $95.22

* 40 shares available at $95.23

* 80 shares available at $95.24

By buying 100 shares, you'll have wiped out the order book from $95.20, $95.21, $95.22, $95.23, and part of $95.24. The order book looks like the following now:

* 60 shares available at $95.24

This means your purchase has caused the stock to rise in value by 4 cents in this convoluted example.

----------

Later, when the company sells 100,000 shares in a secondary offering, they'll be able to do it at a price ~4-cents higher than before. Thanks to your purchase. Similarly, each time they put for shares for sale, it adds to the order book / market depth as sales.

IE: The company can't just sell all 100,000 shares at $95.24. No one is buying $95.24 "right now", so the shares simply won't move.

To have a chance of selling, the company needs to lower the price, and offer the 100,000 shares at $95.23 cents. Someone's probably buying at that point, but it won't be for 100,000 shares. Etc. etc. The company continues to search for the price where the market is willing to buy its shares.

But whenever it decides to do this process, that company is at 4-cents higher thanks to your 100-share purchase.

---------

Of course, all this theory goes to absolute crap when a company with 117-million shares (like BBBY in December 2022) decides to just hype up the apes and sell them 600-million new shares that didn't exist before. Of course the prices would collapse, that kind of environment makes it impossible for prices to go up at all.

There is also a serious moral question here: was it moral and correct for BBBY to sell these 600-million new shares? (And if it was immoral, did they break a law when doing so?). Remember: the board of directors is supposed to represent the will of the shareholders. Was it really the shareholder's desire to be diluted by a 1-to-6 ratio?

Re: Bed Bath and Beyond files for bankruptcy

#295

Post by JoeAltmaier »

Clamchop wrote: post #247
rblatz wrote: post #92

Earlier quoted context omitted.

That's the role Costco has been filling for a lot of Americans recently. Most of the time you are going to find something at a decent price, that may not be best in class but at least it's going to be near the top of the price/utility curve.

I struggle with Costco's inconsistent assortment of products and poor online presence. I don't like going there to be crowded for two or three hours only to walk out with $300 in impulse purchases (I am weak, especially to food) but not what I came for. And they're not good for all things. Their furniture might be reasonable quality but none of it belongs in my home, for example. Gigantic and dated-looking.

Local manager says they have room on the shelves for 4000 products. If something new comes along their customers might like, something has to go.

Re: Bed Bath and Beyond files for bankruptcy

#296

Post by astura »

garyfirestorm wrote: post #101
Animats wrote: post #45

Earlier quoted context omitted.

I want to buy a mattress. Mattress review sites are all phony. Amazon is all phony reviews. Mattress FIRM is hugely overpriced. Bed, Bath, and Beyond's brands were just names they'd acquired. That entire industry has managed to shoot itself in the foot. Probably better to order from an actual manufacturer on Alibaba.

Try Avacado Mattress. I genuinely love the product and if you were to believe their spiel it’s probably sustainable and eco friendly…

$2,000 for a queen sized mattress? No thank you.

Re: Bed Bath and Beyond files for bankruptcy

#297

Post by spaceman_2020 »

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…

Cities have had to literally charge a tax to penalize investors who let their houses stay vacant. You think this would be happening if vacant investor homes was not a problem? [0]

> Many countries are in demographic decline, but overall we still have lots of net population growth for a long time.

Incredible strawman. Population has been growing in Africa and a handful of developing countries. That should have no bearing on valuations in western markets - these population growth centers are neither producers nor consumers of western capital goods/services.

> Productivity is not stalling, and is in fact skyrocketing all over the world.

In your own chart, labor productivty has been growing at a much slower pace since 2010 compared to the previous decades. This can be corroborated by other studies as well that show much more sluggish productivity growth in the last 20 years compared to the years before it.

This is a frustrating comment, filled with hand wavy platitudes about growth for centuries and booming population growth. It completely ignores the temporal component of market valuations.

0: https://vancouver.ca/home-property-development/empty-homes-t...

Re: Bed Bath and Beyond files for bankruptcy

#298

Post by coffeebeqn »

MH15 wrote: post #216
darkhelmet wrote: post #182

Earlier quoted context omitted.

It's not just BBB. This description could apply to a good number of chain stores these days. There are exceptions but this seems to be an increasing trend. There are ghost town stores everywhere you look. If I make a trip to (for example) Target, it feels nothing like Target of 20 years ago. The chances are good that they don't have what I hoped to find there. I'm getting used to being regularly disappointed and am l…

I agree with this assessment but not on the Target conclusion. I'm sure it's quite dependent on the neighborhood but both the Targets by me are always busy and often packed.

If you’re near lots of families with kids then the target is likely quite packed

Re: Bed Bath and Beyond files for bankruptcy

#300

Post by calebcannon »

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…

I think a lot of it is driven by the desire for a product/service to exist, rather than the hard nosed financial decision to “Invest.”The crazy growth of companies like beyond meat and tesla are weird to number crunching investors but retail wants electric cars and not-meat to exist because the individuals think it will improve their quality of life.

You’re completely correct about those financials making no sense though.

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