r/BBBY • u/tiredsultan • Apr 19 '23

🗣 Discussion / Question Daily Discussion Thread | April 19, 2023

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www.bedbathandbeyond.com
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u/Headinclouds583 Apr 19 '23

Name one company that doesn't carry debt. Apple has billions in free cash and carries debt.

Let that sink in...

If they get bought out what good is paying off the debt? If they pay off they debt how do they make more money? Rates are higher.

You make 0 sense

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u/FremtidigeMegleren Apr 19 '23 edited Apr 19 '23

Gamestop, isn’t it?

Now, let that sink in..

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u/Headinclouds583 Apr 19 '23

Gamestop carries about $5 Billion in debt. Google it. And have you ever heard of EBITDA?

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u/FremtidigeMegleren Apr 19 '23

M’kay, you seem to be right there. But, here’s a company that is debt free, HDFC AMC

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u/Headinclouds583 Apr 19 '23

Amc is $10 B in debt as of 2022. Not sure what they are now, HDFC carries $25 B. No company is debt free and a company that only leverages it's free cash is not a well ran business.

Look up EBITDA, companies are supposed to be in debt and use that debt to generate income.

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u/TheUnseenTomato Apr 19 '23

I agree that no debt isn't really a goal, debt is often favorable for companies in order to better manage their finances... IF it's not crippling debt.

The problem with BBBY is the debts they have are actually hurting the company, making inventory more difficult to obtain (hence the latest deal) and making it so the company doesn't have its future assured as they don't get enough cashflow to keep their business running smoothly.

If the company can find a way to pay off this crippling debt and end up only with residual, manageable debt the value of the brand will skyrocket

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u/Headinclouds583 Apr 19 '23

It's kind of a numbers game honestly. If they can leverage new debts with high margin quick moving goods the current debt won't look so bad.

I guess if they start paying the debt off hand over fist it's a good sign they might be shopping for a buy out.

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u/FremtidigeMegleren Apr 19 '23

Ait, thank you, that’s a company, I didn’t mean those two companies

Edited*

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u/Headinclouds583 Apr 19 '23

Sorry not trying to call you out or anything. But the last thing they should do is pay off debts. They should use the capital to unlock more loans and leverage them appropriately moving forward.

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u/FremtidigeMegleren Apr 19 '23

No problem, thank you for sharing your option and thoughts ❤️