GME - Children's Place: Mithaq Capital's Aggressive Buying Will Lead To Either A Buyout Offer Or A Short Squeeze

2024-02-24 01:35:24 ET

Summary

• PLCE has increased viability as a meme stock due to Mithaq Capital's aggressive buying and upheaval of the company's leadership team.
• Mithaq Capital has purchased 7 million of PLCE's 12.5 million shares outstanding. Most of those shares being purchased in a week-long buying spree this month.
• Mithaq's behavior around its attempted takeover of Aimia provides evidence that a takeover offer on PLCE may come soon.
• With 2 million shares short and 4 million shares in the float, the short interest is at least 50%, making PLCE a prime short squeeze candidate.
• Mithaq will likely provide more favorable options for debt financing, removing insolvency risk and decreasing interest payments for PLCE.

A stock is worth exactly how much someone with money is willing to pay for it. That edict certainly rings true on The Children's Place, Inc. (PLCE). A slowly dying and heavily indebted retail outlet is generally not in my interest until it declines to a small fraction of its book value. As BV per share is less than $10 and headed lower as long as it reports net losses, PLCE certainly doesn't meet this criteria. However, my opinion as an individual retail investor doesn't hold a lot of weight next to a fund owned and operated by a Saudi family that runs the country's largest bank....

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