Market Valuation: $700 Million
Ironbound Buy-Side Valuation: $99 Million
Ironbound Assessment: New Jersey Based Bed Bath & Beyond, founded in 1971, is an American retailer that sells an assortment of merchandise in the Home, Baby, Beauty & Wellness markets. Our buyout valuation is $1.5 Billion that would account for the cash balance, property, and some additional goodwill. Unfortunately, the company faces major headwinds to profitability despite generating nearly $10 Billion in sales from numerous high quality retail locations and digital on-demand transformation strategies. Several problems at the Company can be rooted in a culture steeped in financial mismanagement. At the end of 2021, the company reported having only $440 million in cash on the balance sheet, of which most could be wiped-out to cover $320 million in current merchandise credits and gift card liabilities. The company faces shareholder lawsuits for false or misleading financial statements and also lawsuits for unjust enrichment using corporate assets to repurchase shares. Certain executive officers were awarded stock options with strike prices of $6, while employees were offered strikes ranging from $17 to $32. With a book value of only $175 million, our position is to stay away from this company until the stock drops below $1 per share to profit from a short squeeze.
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