BIG - Big Lots' Final Countdown: Plan Your Exit Strategically

2024-07-01 13:31:25 ET

Summary

• Big Lots faces trouble with soft consumer spending and liquidity issues, leading to a 78% stock slide year-to-date.
• The company risks violating loan covenants due to high operating losses and limited ability to take on more debt, potentially leading to defaults and bankruptcy.
• Big Lots' liquidity issues and ongoing operating losses may lead to difficulties in meeting financial obligations, risking defaults and accelerated debt repayment demands.

Investment Thesis

Historically, I have avoided investing in Big Lots, Inc. ( BIG ) due to persistent operational issues and lack of a clear strategic plan. My confidence in the management's ability to turn around the business, particularly under the new CEO, has been low. In our last coverage , we considered Big Lots a potential value play when its stock was below $5....

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