It wasn’t the good news I was hoping for (a takeout), but it was good enough. This morning, B. Riley announced it was taking a 29.4% financial stake in bebe stores. This announcement is good for two reasons. First, B. Riley is converting its bridge loan into equity, which takes away any risk of bankruptcy. Second, all transactions were done above the last closing price of $4.44, confirming my view that bebe stores is significantly undervalued.
I’m going to let you in on a little secret. Maybe it’s a big secret since I talk about personal finance and investing. I don’t know my own salary. Or my net worth. Or how much my investments are up (or down). Sometimes I don’t even remember my own name. I keep track of my expenses, but I don’t really look at that either.
I know what all these numbers are directionally. But my point is I don’t keep track of them on a regular basis. If you want to be successful, you wouldn’t keep track of any of this stuff either, except your name. You sound like an idiot if you don’t know that.
If you’re new to investing, there’s one thing you should know: investors are lazy. If you’re an experienced investor, you should already know this because you are lazy. With thousands of stocks listed in the US alone, investors are too lazy to do in-depth research on them all. Looking at valuation helps investors quickly judge a company and compare them vs. peers.
Although there have been a few hiccups along the way, like the voluntary delisting from NASDAQ to OTC in December and the sale of its headquarters falling through, BEBE is largely living up to expectations.
As I have discussed previously, the company is moving to a licensing-only model. Since it will no longer need designers, warehouses, and distribution centers, costs should become immaterial. There’s been some debate around how low costs can go, since the company is not great around providing detailed information. Now, it appears we finally have a rough idea, and it’s better than I expected.
Continue reading “BEBE’s Taking an Axe to Costs”
You have one bitcoin burning a hole in your hard drive and the holidays are coming, so you’re looking for gift ideas – congratulations! Right now one bitcoin is going for around $17,500. Hopefully you mined this bitcoin in its infancy, or bought it when it was under $100. Because if you did, it’s all upside! Less so if you bought it yesterday, although you’ve done fairly well if you bought it two days ago. I have no view on where bitcoin will go, but now may not be a bad time to take a little off the table. Here are my suggestions on what you can buy for $17,500. Tax not included, but if you have one bitcoin, I’m sure you can scrounge for the rest!
Today, BEBE announced that it is planning to VOLUNTARILY delist from the NASDAQ and move to the OTC market. As a result of this news, the stock closed down almost 14%. In my totally biased opinion, BEBE’s voluntary delisting is a big nothing burger.
It’s that time of year again! Pumpkin spice, snow, and if you’re lucky, eggnog. Preferably eggnog spiked with a lot of alcohol. Know what else it’s time for? Protecting your P&L!
It’s been a while since I took the CFA exams. You’d be surprised how many stone tablets the curriculum was written on back then. And it was so noisy, with everybody working as fast as they could with their abacuses. Okay, so it wasn’t that long ago. But it was longer than I’d like to admit. Thankfully, I passed all three levels on my first try. Here are my tips so you can too!
“What am I missing?” These are the four most important words in the world of investing. If you want to invest like a professional, this is what you always need to ask yourself. Unlike, “This time it’s different”. If you hear an investor say this to you, run away! Don’t look back and run away as fast as you can, preferably in a zig zag pattern so he doesn’t get you!
As an institutional investor, I focus solely on the numbers. My valuation is based on a set of verified assumptions. I look at where something trades vs. historicals, and my upside/downside is based on probabilities. I’m just kidding. It’s true, I look at all those things, but sometimes you just need to go with your gut. When you meet with a management team and they sound confident, sometimes you just need to buy the stock because you think they’ll deliver. Hate selling is the opposite that.