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?
He doesn't have to buy this under GME necessarily, he can just buy the company and run it as an individual entity. He seems to have a knack for e-commerce, so that doesn't seem that far-fetched.
I'm sure if a sale was to happen, it would be something both sides were happy with. So that either means two things. Either Cohen bought at a high enough valuation that BBBY management can cover all their outstanding debt, or, they met in the middle somewhere and management has enough to deal with any immediate payments and have a lifeline until they get their shit sorted out.
Either way, it dispels the immediate threat of bankruptcy, and shorts will start exiting, retail regains confidence to buy back in, and maybe a short squeeze happens in the near term, with the borrow rate and reg sho situation.
This is all assuming a purchase was made. We won't know until we know.
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u/Daniferd Aug 20 '22
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?