Bed Bath & Bankrupt

After months (well, years) of attempting to right the ship, Bed Bath & Beyond has finally called it quits. ๐Ÿ‘Ž

The struggling retailer was trying to make it until May to hold a special shareholder vote, where it was proposing a reverse split. Executives hoped a higher share price could broaden its investor base and give it more room to raise additional equity capital. ๐Ÿ––

However, it filed for Chapter 11 bankruptcy protection this weekend as it could not secure enough money to continue operating. The concept isn’t surprising to investors, as the company issued a “going concern” notice following its rough holiday season, but the timing is. Many hoped its recent financing arrangements could extend its life enough to approve the reverse split.

Instead, Bed Bath & Beyond is entering liquidation mode. It has secured $240 million in debtor-in-possession financing from Sixth Street to continue operating through the bankruptcy process. As for who is steering the ship, longtime retail turnaround expert Holly Etlin has that job. She’s been appointed as chief financial officer and chief restructuring officer. ๐Ÿ‘ฉโ€๐Ÿ’ผ

The company’s 360 namesake stores and 120 Buybuy Baby locations will remain open during the liquidation. And it’s currently commissioning the bankruptcy court for permission to auction off those brand names. However, it’s already committed to closing its Harmon FaceValue stores. ๐Ÿฌ

As for the stock, $BBBY shares tumbled to fresh all-time lows. ๐Ÿ“‰

While there was once hope the company could restructure, the liquidation process essentially turns the situation into a math equation for common shareholders. How much, if anything, will be left for them after all the company’s other creditors have been paid? That’s the big question. ๐Ÿงฎ

For now, volatility will likely continue as longer-term holders determine what to do with their remaining shares (or profitable short positions) and traders capitalize on the record trading volumes.

As for customers, NBC News broke down what they can expect as it winds down operations. ๐Ÿ“

AI’s Copyright Crisis Begins

We all knew copyright law would be a key issue at the heart of the artificial intelligence (AI) revolution, but we didn’t know when. Well, the time has come. โŒ›

Today, The New York Times filed a lawsuit against Microsoft and OpenAI, accusing them of infringing copyright and abusing the newspaper’s intellectual property. In its court filing, the publisher said it looks to hold the two companies accountable for the “unlawful copying and use of The Times’s uniquely valuable works,” claiming billions in statutory and actual damages.

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Trouble Continues For Telecoms

We last talked about Telecom stocks about six months ago, when their stocks came under significant pressure due to slowing growth, competition concerns, and regulatory issues. We then discussed them in October when investors dumped defensive stocks for higher-yielding treasuries with no risk.

Prices have since rebounded sharply with the broader market as investors priced in Fed rate cuts this year. However, Verizon was back in the news today for a not-so-great reason. Let’s dig in. ๐Ÿ‘‡

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Pfizer’s Flop Continues

It’s been a rough ride for pharmaceutical giant Pfizer since the end of the pandemic, and that rollercoaster ride continues today. ๐ŸŽข

The company last announced earnings in October but needed to update Wall Street on its 2024 forecast. It cited weak demand for its Covid products as the reason for a weaker-than-anticipated revenue and earnings forecast.

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Justice Department Targets UnitedHealth

With the upcoming presidential election looming, the current administration is itching to accomplish more before a potential shakeup. While antitrust regulators have had a field day with big tech, airlines, grocery chains, and others this year, they’re taking another look at UnitedHealth, especially given its recent cybersecurity issues. ๐Ÿ•ต๏ธโ€โ™‚๏ธ

The Justice Department is poking around to figure out the relationship between the company’s UnitedHealthcare insurance unit and its Optum health-services division. They’ve asked how UnitedHealth’s acquisitions of doctor groups might affect competitors and consumers. ๐Ÿค”

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