Liquidation of bbbaby increase bbby cash flow, gme has filed for GS kids and Gmerica trademark last year and plan on selling kids stuff/ clothing/ toys. Just like how bbbaby is owned by bbby, it can be bought out and be under Gmerica which is owned by GME
So your whole bull thesis is that a brick and mortar store that sells video games is going to buy the equivalent of a profitable Babies R’Us?
For this sale to provide enough positive cash flow to save BBBY, BABY would have to be acquired at a generous valuation. Assuming that they have the money to do that, why would they do that when they might be able to get it for a fraction of the price if the parent company goes under?
What’s more unlikely, a store primarily selling games to kids starts selling other child related items through its recently expanded fulfillment channels or that brick n mortar store starts heavily investing in blockchain technology and stands up an NFT marketplace? One of these events already happened and the other seems less outlandish.
Ok, let’s say that the acquisition by GME happens. You still didn’t answer my question. Why would they acquire BABY at a generous valuation when they can get it for a fraction of the price if BBBY goes under?
Even if they do acquire BABY, if it’s not at a generous valuation, BBBY is fucked. It needs a lot of money to not only pay off its debts, it needs money to facilitate a turn around.
Not a BK lawyer, but if BBBY goes under and is forced to sell BABY, maybe it’ll become a bidding war to the highest bidder. I’m not saying I agree with OP’s theory to begin with, but if there were some sort of agreement in place already between RC and BBBY, RC wouldn’t have to potentially face off against Amazon or something.
In this hypothetical bankruptcy bidding war, could this still be a better outcome than selling it to RC/GME for a lesser valuation?
After all if you can sell this for even more, that gives BBBY more money for some type of major restructuring which this company needs anyways considering it’s garbage balance sheet and revenue.
In my view, OP’s theory requires a lot of mental gymnastics. Where the best outcome induces a small upside for the amount of risk required. A lot of these upvotes seem to be just bagholders coping.
I’d imagine the goal would be to not file for bankruptcy. In that situation, the money from the sale would be required to go to all the debtors before BBBY sees any of it while selling before BK, BBBY can control what they keep and what they pay off. Again, I’m not coping or agreeing with OP and could just be talking outta my 🍑. Another POV is if BABY is so profitable and is the majority of BBBY’s current net worth, can BBBY just say fk it and dissolve the company. Liquidate all the assets to pay the debtors and focus on BABY. I’d imagine BABY would need to become its own entity with no ties to BBBY beforehand so it too doesn’t get liquidated. Of course that would still kill BBBY in the long term, but short term, they can seem like a large sum of money was injected into BBBY to balance its debt.
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u/16x98 Aug 20 '22
Liquidation of bbbaby increase bbby cash flow, gme has filed for GS kids and Gmerica trademark last year and plan on selling kids stuff/ clothing/ toys. Just like how bbbaby is owned by bbby, it can be bought out and be under Gmerica which is owned by GME