2024-01-22 09:30:00 ET
Summary
- I've recently tripled down on my investment in BNED, buying more shares after a significant sell-off.
- The sell-off was triggered by an article suggesting a policy change that would affect BNED's business, but I believe the sell-off is irrational.
- I explain the benefits of BNED's First Day Complete program and argue that the sell-off is based on misunderstandings and fear.
Today's article is a defense of my Barnes & Noble Education ( BNED ) buy thesis. My original article was published on December 13, 2023 and it is very comprehensive and provides an extensive background of the company and the compelling setup. On January 8th and 9th 2024, my $2 price target was not only met, it was exceeded, as BNED shares closed at $2.24 (on January 9, 2024). On January 10, 2024, however, there was a USA Today article that highlighted some proposed changes, by the Department of Education (DOE) relating to unused college meal plan balances as well as how Equitable Access Plans are billed. This article and the proposed changes sent BNED shares down 50%, and on massive volumes (with 9.5 million shares or nearly 20% of the entire share count changing hands). To be crystal clear, these are not actual changes and won't be enacted, if they even get enacted, until Fall 2025 , at the earliest. Secondly, there is an extensive public comments period where all stakeholders (BNED, Follett, other smaller competitors, Publishers, Colleges, and Students) get to present empirical evidence of the merits of the Equitable Access Plans. Thirdly, and worst case, if fact, logical, and compelling evidence are somehow overlooked, during the extensive comment period, and these DOE changes were enacted, BNED's First Day Complete and Equitable Access Plans would simply move to 'Opt In' from the current 'Opt Out' format. Lastly, for additional perspective, on January 18, 2024, BNED published this short policy paper ( DISPELLING MYTHS ABOUT EQUITABLE ACCESS FOR PARENTS, FACULTY, ADMINISTRATORS, AND STUDENTS ), which explains FDC, what it does and it provides ample quoted statements by actual colleges, professors, and students, of the merits of FDC.
Moving along, to explain the title of today's article, I haven't written a doubling down or tripling down article in a while, so I'm overdue. Today's article is expressly designed to remedy that dry spell and add a new piece to the genre. In fact, the last time I wrote a 'doubling down' or 'tripling down' piece was back on June 21, 2023, was when I wrote on Advanced Emissions Solutions, Inc. ( ADES ). Since that article was published, and measured through yesterday, January 19, 2024, ADES shares have climbed by 120%....
Read the full article on Seeking Alpha
For further details see:
Barnes & Noble Education: After The DOE Scare, Why I've Tripled Down