Monday, July 25, 2022

RCI Hospitality Holdings (RICK)
Another Club Acquisition

With more than 50 units, RCI Hospitality Holdings, Inc., through its subsidiaries, is the country’s leading company in gentlemen’s clubs and sports bars/restaurants. Clubs in New York City, Chicago, Dallas-Fort Worth, Houston, Miami, Minneapolis, Denver, St. Louis, Charlotte, Pittsburgh, Raleigh, Louisville, and other markets operate under brand names such as Rick’s Cabaret, XTC, Club Onyx, Vivid Cabaret, Jaguars Club, Tootsie’s Cabaret, and Scarlett’s Cabaret. Sports bars/restaurants operate under the brand name Bombshells Restaurant & Bar.

Joe Gomes, Senior Research Analyst, Noble Capital Markets, Inc.

Joshua Zoepfel, Research Associate, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

Acquisition. Last Friday, RCI announced closing on purchase agreements that will enable the Company to open a third adult nightclub in the Odessa, TX area. The new club will be RCI’s third in the area, complimenting the existing Rick’s Cabaret Odessa and Jaguar’s Club Odessa. To be called PT’s Showclub, the new location will offer adult entertainment and liquor service and is expected to appeal to a different demographic from the existing clubs.

Details. RCI paid $1.8 million in cash and seller financing for the club’s assets, including all necessary licenses, and for the 5,180 square foot building and one acre property. The property was the former home of a couple of other adult nightclubs. Although financial details were not provided outside of the acquisition cost, other properties in the area are listed in the $70-$80 per sq/ft range, according to LoopNet, suggesting a potential cost of the property in the $400,000 range, leaving $1.4 million for the business. At management’s normal 3-5x EBITDA acquisition target, this would suggest expected annual EBITDA contribution in the $400,000 range. The club should begin contributing to results by the end of September….

This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision. 

Monday, July 25, 2022

Vera Bradley (VRA)
CEO Change and Cost Initiatives Update

Joe Gomes, Senior Research Analyst, Noble Capital Markets, Inc.

Joshua Zoepfel, Research Associate, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

A Transition. Vera Bradley announced Thursday the retirement of long-time President and CEO Robert Wallstrom. Mr. Wallstrom will remain in the position until a successor is named, which is expected by the beginning of 2023, and will work with the board of directors in the search. The search will consider both internal and external candidates, with a focus on a CEO to continue the Company’s focus on building consistent, sustainable growth over the long-term for the Vera Bradley and Pura Vida businesses.

Cost Initiatives Update. The Company also provided an update to the cost reduction initiatives, announced in the first quarter earnings call. Management has identified annualized cost reductions totaling approximately $25 million, at the high end of the $15-$25 million forecasted range. A portion of the savings are expected to be realized this fiscal year and will be fully implemented in the fiscal year ending February 2024….

This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision. 

Vera Bradley, Inc. Announces CEO Transition

Research, News, and Market Data on Vera Bradley

Retirement of President and CEO Robert Wallstrom planned at end of 2022; search for new CEO underway

Company also solidifies annual cost reduction initiatives totaling $25 million

FORT WAYNE, Ind., July 21, 2022 (GLOBE NEWSWIRE) — Vera Bradley, Inc. (Nasdaq: VRA) (the “Company”) today announced the planned retirement of President and Chief Executive Officer Robert Wallstrom. Wallstrom will remain President and CEO until a successor is named, which is expected by the beginning of 2023. Wallstrom will work with the Board of Directors in their national search for his successor.

Wallstrom has led Vera Bradley, Inc. as President and Chief Executive Officer since 2013, executing the Company’s business transformation while also championing corporate social responsibility, associate engagement, and philanthropy initiatives. Wallstrom oversaw the expansion of the Company’s portfolio in 2019 with the acquisition of lifestyle brand Pura Vida, which achieved B Corp Certification in 2022. Under Wallstrom’s leadership, in 2022, Vera Bradley, Inc. was named America’s #1 Best Midsize Employer and #11 Best Employer for Diversity by Forbes and Statista.  

Robert Hall, Chairman of the Company’s Board of Directors, noted, “Rob is a bold leader, an innovator, and a visionary who has worked tirelessly to evolve the Company and position it for growth. As an advocate for the power of business to create positive influence and outcomes for people and communities, Rob places a unique focus on building an organization with a strong culture that strives to positively impact all stakeholders. I am proud to have partnered with Rob over the last nine years, and we are grateful for his principled and collaborative leadership.”

Hall continued, “As we search for Rob’s successor, we are in the desirable position of having two strong, iconic brands – Vera Bradley and Pura Vida – with loyal and dedicated customer bases, a solid balance sheet, and a talented leadership team. The Board takes very seriously its responsibility to find the right CEO who will continue our focus on building consistent, sustainable growth over the long term. The next CEO also will have to successfully manage through this challenging economic period, including overseeing implementation of our cost reduction initiatives which will better position us for the future.”

Both internal and external candidates will be considered for the CEO role.

“It has been my great privilege to serve as President and CEO of Vera Bradley, Inc. over the last nine years, and it has been a tremendous honor to work with our highly talented, creative, and dedicated team of associates,” noted Wallstrom. “We have driven innovation across both of our brands, built strong engagement with our associates and customers, and enhanced our purpose-driven mission. I am confident the Company will thrive in the future. I look forward to continuing to guide the Company through this transition period and supporting my successor as they lead the company into the next stage of growth.”

Cost Reduction Initiatives

In conjunction with its first quarter financial results, Company management indicated they were in the midst of a comprehensive cost-reduction and efficiency process and expected to complete the identification of cost reductions in the second quarter of this fiscal year.

Management has identified annualized cost reductions totaling approximately $25 million, which will be fully implemented in the fiscal year ending February 3, 2024. A portion of the cost reductions will be realized in the fiscal year ending January 28, 2023 and have been included in the Company’s previously issued guidance.

Expense savings are derived across various areas of the Company, including retail store efficiencies, marketing expenses, information technology contracts, professional services, logistics and operational costs, and corporate payroll (primarily through attrition).

About Vera Bradley, Inc.

Vera Bradley, Inc. operates two unique lifestyle brands – Vera Bradley and Pura Vida. Vera Bradley and Pura Vida are complementary businesses, both with devoted, emotionally-connected, and multi-generational female customer bases; alignment as casual, comfortable, affordable, and fun brands; positioning as “gifting” and socially-connected brands; strong, entrepreneurial cultures; a keen focus on community, charity, and social consciousness; multi-channel distribution strategies; and talented leadership teams aligned and committed to the long-term success of their brands.

Vera Bradley, based in Fort Wayne, Indiana, is a leading designer of women’s handbags, luggage and other travel items, fashion and home accessories, and unique gifts. Founded in 1982 by friends Barbara Bradley Baekgaard and Patricia R. Miller, the brand is known for its innovative designs, iconic patterns, and brilliant colors that inspire and connect women unlike any other brand in the global marketplace.

In July 2019, Vera Bradley, Inc. acquired a 75% interest in Creative Genius, Inc., which also operates under the name Pura Vida Bracelets (“Pura Vida”). Pura Vida, based in La Jolla, California, is a digitally native, highly-engaging lifestyle brand founded in 2010 by friends Paul Goodman and Griffin Thall. Pura Vida has a differentiated and expanding offering of bracelets, jewelry, and other lifestyle accessories.

The Company has three reportable segments: Vera Bradley Direct (“VB Direct”), Vera Bradley Indirect (“VB Indirect”), and Pura Vida. The VB Direct business consists of sales of Vera Bradley products through Vera Bradley full-line and factory outlet stores in the United States, verabradley.com, verabradley.ca, Vera Bradley’s online outlet site, and the Vera Bradley annual outlet sale in Fort Wayne, Indiana. The VB Indirect business consists of sales of Vera Bradley products to approximately 1,800 specialty retail locations throughout the United States, as well as select department stores, national accounts, third party e-commerce sites, and third-party inventory liquidators, and royalties recognized through licensing agreements related to the Vera Bradley brand. The Pura Vida segment consists of sales of Pura Vida products through the Pura Vida websites, www.puravidabracelets.com, www.puravidabracelets.eu, and www.puravidabracelets.ca, and through the distribution of its products to wholesale retailers and department stores.

Vera Bradley Safe Harbor Statement

Certain statements in this release are “forward-looking statements” made pursuant to the safe-harbor provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements reflect the Company’s current expectations or beliefs concerning future events and are subject to various risks and uncertainties that may cause actual results to differ materially from those that we expected, including: possible adverse changes in general economic conditions and their impact on consumer confidence and spending; possible inability to predict and respond in a timely manner to changes in consumer demand; possible loss of key management or design associates or inability to attract and retain the talent required for our business; possible inability to maintain and enhance our brands; possible inability to successfully implement the Company’s long-term strategic plan; possible inability to successfully open new stores, close targeted stores, and/or operate current stores as planned; incremental tariffs or adverse changes in the cost of raw materials and labor used to manufacture our products; possible adverse effects resulting from a significant disruption in our distribution facilities; or business disruption caused by COVID-19 or other pandemics. Risks, uncertainties, and assumptions also include the possibility that Pura Vida acquisition benefits may not materialize as expected and that Pura Vida’s business may not perform as expected. More information on potential factors that could affect the Company’s financial results is included from time to time in the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections of the Company’s public reports filed with the SEC, including the Company’s Form 10-K for the fiscal year ended January 29, 2022. We undertake no obligation to publicly update or revise any forward-looking statement.

CONTACTS:
Investors:

Julia Bentley, VP of Investor Relations and Communications
jbentley@verabradley.com
(260) 207-5116

Media:           

mediacontact@verabradley.com
877-708-VERA (8372)

 

Vera Bradley Foundation For Breast Cancer Names Stephanie Scheele Executive Director

Research, News, and Market Data on Vera Bradley

FORT WAYNE, Ind., July 19, 2022 (GLOBE NEWSWIRE) — The Vera Bradley Foundation for Breast Cancer (the “Foundation”) today announced, after a national search, it has named Stephanie Scheele as its new Executive Director.

Scheele has held the post of Chief Purpose and Communication Officer of Vera Bradley, Inc. (the “Company”) since October 2021, responsible for the Company’s enterprise-wide environmental, social and governance (ESG) efforts, including oversight of the Vera Bradley Foundation for Breast Cancer. Scheele joined the Company in 2001 and was the driving force behind various marketing and creative initiatives during her tenure, advancing the Vera Bradley brand’s marketing to an integrated, customer-segmented, research-based approach. She was named VP, Marketing Strategy and Operations in 2015; promoted to Interim Chief Marketing Officer in 2017; and promoted to Chief Marketing Officer in 2018. Prior to joining Vera Bradley, Inc., Scheele worked for Sunrise Greetings, a subsidiary of Hallmark. Scheele has served on the Foundation Board of Directors since 2018.

“We are absolutely thrilled to name Stephanie Scheele Executive Director of the Foundation. Stephanie has served on our board and has worked tirelessly over the last several years on fundraising efforts for the Foundation,” shared Ruth Cook, Chair of the Vera Bradley Foundation Board. “Her strategic, marketing, and creative expertise coupled with her institutional knowledge of the Foundation will be instrumental as we elevate funding for life-saving research that is impacting women, men, and their loved ones worldwide.”

Since 2000, the Foundation has provided $37.5 million of funding to the Indiana University School of Medicine (“IU School of Medicine”), allowing them to amass the talent, technology, and resources to become a national leader in targeted breast cancer therapies, specifically for triple negative breast cancer. In April 2022, the Foundation made an additional gift commitment of $12.5 million to IU School of Medicine, bringing the non-profit’s total commitment to breast cancer research to $50 million. The Foundation’s ongoing support led to the 2018 creation of the Vera Bradley Foundation Center for Breast Cancer Research at the Indiana University Melvin and Bren Simon Comprehensive Cancer Center (the “IU Cancer Center”) where more than 30 investigators collaborate on breast cancer discoveries. In 2019, the IU Cancer Center was designated a Comprehensive Cancer Center, the highest level of recognition awarded by the National Cancer Institute for research excellence.

Scheele noted, “I am honored and excited to accept the position of Executive Director of the Foundation. I am intensely passionate about our cause and see a future where a diagnosis of breast cancer is not scary or overwhelming. The Foundation has and will continue to provide hope to countless women and men, along with their families. I am extremely grateful for each of the dedicated servant leaders at the IU Cancer Center working tirelessly to perfect therapies and for all of the donors and volunteers that make this work possible.”

ABOUT VERA
BRADLEY FOUNDATION FOR BREAST CANCER

The Vera Bradley Foundation for Breast Cancer raises funds for breast cancer research to find a cure and to improve the lives of the many affected by this disease. The Foundation has contributed $37.5 million to the Vera Bradley Foundation Center for Breast Cancer Research at the Indiana University School of Medicine and has pledged to raise an additional $12.5 million. The Center is focused on developing and dramatically improving therapies for some of the most difficult-to-treat types of breast cancer. Funds are raised through special events, partner events, and individual donations. For more information, visit www.verabradley.org.

Press Contact
Greg Jaeger
Director of Public Relations & Social Media, Vera Bradley
gjaeger@verabradley.com

Friday, July 15, 2022

Bassett Furniture (BSET)
Raises Quarterly Dividend by 14%

Bassett Furniture Industries, Incorporated manufactures, markets, and retails home furnishings in the United States. The company operates in three segments: Wholesale, Retail, and Logistical Services. It is involved in the design, manufacture, sourcing, sale, and distribution of furniture products to a network of company-owned and licensee-owned Bassett Home Furnishings (BHF) retail stores, as well as independent furniture retailers; and wood and upholstery operations. As of September 16, 2017, the company operated a network of 91 company-and licensee-owned stores. It also provides shipping, delivery, and warehousing services to customers in the furniture industry. In addition, the company owns and leases retail store properties. It also distributes its products through other multi-line furniture stores, Bassett galleries or design centers, specialty stores, and mass merchants. Bassett Furniture Industries was founded in 1902 and is based in Bassett, Virginia.

Joe Gomes, Senior Research Analyst, Noble Capital Markets, Inc.

Joshua Zoepfel, Research Associate, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

Increased Dividend. As we expected, Bassett’s Board of Directors increased the quarterly dividend, raising the quarterly payout by 14% to $0.16 per share of common stock. The dividend increase is part of management’s goal of returning capital to shareholders. As we mentioned in our last report, the sale of Zenith and the strong operating results year-to-date have enabled Bassett to return excess capital to shareholders, including a one-time special dividend, share repurchases, and now an increased regular quarterly dividend.

Swimming Against the Tide. Since the June 30th release of fiscal second quarter earnings, BSET shares have risen 38.7%, compared to a 0.7% rise for the NASDAQ composite. The rise is being driven by the Company’s solid operating results, as well as the ongoing return of capital, in our opinion….

This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision. 

ACCO Brands Corporation Announces Second Quarter 2022 Earnings Webcast

Research, News, and Market Data on ACCO Brands

LAKE ZURICH, Ill.–(BUSINESS WIRE)– ACCO Brands Corporation (NYSE: ACCO) today announced that it will release its second quarter 2022 earnings after the market close on August 8, 2022. The Company will host a conference call and webcast to discuss the results on August 9 at 8:30 a.m. EST. The webcast can be accessed through the Investor Relations section of www.accobrands.com and will be available for replay.

About ACCO Brands
Corporation

ACCO Brands, the Home of Great Brands Built by Great People, designs, manufactures and markets consumer and end-user products that help people work, learn, play and thrive. Our widely recognized brands include AT-A-GLANCE®, Five Star®, Kensington®, Leitz®, Mead®, PowerA®, Swingline®, Tilibra® and many others. More information about ACCO Brands Corporation (NYSE: ACCO) can be found at www.accobrands.com.

Christopher McGinnis
Investor Relations
(847) 796-4320

Julie McEwan
Media Relations
(937) 974-8162

Source: ACCO Brands Corporation

Image Credit: Ryan (Flickr - modifications made)

The GameStock Stock Split May Serve to Chase out Institutional Short-Sellers

GameStop announced a three-share dividend for each share held. This is somewhat different than a four-for-one stock split from a tax standpoint and for those that are short GameStop. The move has an immediate impact on those that own the stock (largely individual investors), and on the many that are still short the stock (largely institutional investors). The announced split, or the split dividend, where holders would receive three additional shares of (GME) after the market close on July 21, has caused some confusion among the retail holders of the stock – and is likely causing some pain among those that are short GameStop. Shares are up near 8% today (July 7) on the news. 

Source: Gamestop.com

What to Know

GameStop shareholders voted in June in favor of allowing expanded share authorization to one billion outstanding shares from 300 million. This authorization allows for the announced split. During the spring, management asked for authorization saying the split would “provide flexibility for future corporate needs.”

The foreshadowing of this split should have made the high percentage of short-interest in GME retreat some. Recent Morningstar data shows that 21% of GameStop’s entire stock float was being shorted. A short interest percentage above 15% is generally considered to be elevated. Short-sellers are responsible for compensating the lending broker for all dividends. This is generally simple with cash dividends but could be messy when the dividend is stock shares.

The additional shares will be distributed on July 21, and Gamestop stock will begin trading on a split-adjusted basis on Friday, July 22.

The dividend will have the effect of reducing the cost of each share after the split,  this will make it easier for smaller investors to purchase shares of the company. The heightened access to shares could positively impact the market value of all shares outstanding post dividend-split.

 

Management Difference

Ryan Cohen became the chairman of GameStop’s board a year ago. The company has been modernizing by adding executives and employees with backgrounds in technology, e-commerce, and blockchain. It’s a classic fight for survival for the company that began its lifecycle as cutting edge and later found itself stodgy and old. Newer products are being added to the company’s line-up designed to put them back as a solid competitor in today’s gaming retail world.

Following the appointment of Cohen, the company invested in fulfillment and customer care, as well as expanding its offerings to include TVs, computer supplies, and even a marketplace for NFTs.

Management’s decision to provide a split in the form of a dividend raises additional challenges for short sellers of GME. The value of stocks tend to rise after a split welcomes smaller buyers that may have been locked out. This could serve to cause a squeeze on short players already forced by rising margin interest rates. As a dividend, rather than a split, there is an obligation for short sellers to make those they borrowed the stock from whole. This could cause many short positions to be closed out before the record date of the dividend.

Paul Hoffman

Managing Editor, Channelchek

Suggested Content

AMC is Thinking Outside the Box Office and Diversifying

Michael Burry Calls Out Fed for Not Following Plan It Just Laid Out

Is This Bullish for GameStop?

Placing a Bid to Own a Public Company

Sources

https://news.gamestop.com/news-releases/news-release-details/gamestop-announces-four-one-stock-split

https://www.thestreet.com/memestocks/gme/why-gamestop-stock-is-on-a-verge-of-a-short-squeeze#:~:text=Short%20interest%3A%20The%20latest%20data,stock%20float%20was%20being%20shorted.

https://www.sec.gov/ix?doc=/Archives/edgar/data/1326380/000132638022000100/gme-20220706.htm

https://www.thestreet.com/memestocks/gme/gamestop-stock-is-there-still-short-squeeze-potential

Stay up to date. Follow us:

Tuesday, July 05, 2022

Bassett Furniture (BSET)
Bests 2Q22 Consensus, But What About Going Forward?

Bassett Furniture Industries, Incorporated manufactures, markets, and retails home furnishings in the United States. The company operates in three segments: Wholesale, Retail, and Logistical Services. It is involved in the design, manufacture, sourcing, sale, and distribution of furniture products to a network of company-owned and licensee-owned Bassett Home Furnishings (BHF) retail stores, as well as independent furniture retailers; and wood and upholstery operations. As of September 16, 2017, the company operated a network of 91 company-and licensee-owned stores. It also provides shipping, delivery, and warehousing services to customers in the furniture industry. In addition, the company owns and leases retail store properties. It also distributes its products through other multi-line furniture stores, Bassett galleries or design centers, specialty stores, and mass merchants. Bassett Furniture Industries was founded in 1902 and is based in Bassett, Virginia.

Joe Gomes, Senior Research Analyst, Noble Capital Markets, Inc.

Joshua Zoepfel, Research Associate, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

2Q22 Results. Revenue for the fiscal second quarter ended May 28th was $128.7 million, up 17.0% over the prior year period and up from $117.1 million in the fiscal first quarter. Wholesale revenue rose 15.3% to $87.5 million, while Retail revenue rose 21.0% to $75.6 million. Bassett reported net income from continuing operations of $7.7 million, or $0.81 per share, compared to net income from continuing operations of $5.1 million, or $0.51 per share, in the prior year. We had forecast revenue of $116 million and EPS from continuing operations of $0.46.

Record Retail. The second quarter was an all-time record sales and profitability performance for the Retail segment. Basset continues to refine it’s store network and the move to open regional fulfillment centers should expand the addressable market as consumers seeking an “immediate” option will now be able to shop Bassett….

This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision. 

Schwazze CEO Justin Dye and CFO Nancy Huber make a formal corporate presentation. Afterwards they are joined by Noble Capital Markets Senior Research Analyst Joe Gomes for a Q & A session. Research, News, and Advanced Market Data on SHWZ Information on upcoming live virtual roadshows Schwazze (OTCQX: SHWZ) is building the premier vertically integrated cannabis company in Colorado and plans to take its operating system to other states where it can develop a differentiated leadership position. Schwazze is the parent company of a portfolio of leading cannabis businesses and brands spanning seed to sale. The Company is committed to unlocking the full potential of the cannabis plant to improve the human condition. Schwazze is anchored by a high-performance culture that combines customer-centric thinking and data science to test, measure, and drive decisions and outcomes. The Company’s leadership team has deep expertise in retailing, wholesaling, and building consumer brands at Fortune 500 companies as well as in the cannabis sector. Schwazze is passionate about making a difference in our communities, promoting diversity and inclusion, and doing our part to incorporate climate-conscious best practices. Medicine Man Technologies, Inc. was Schwazze’s former operating trade name. The corporate entity continues to be named Medicine Man Technologies, Inc. Schwazze derives its name from the pruning technique of a cannabis plant to enhance plant structure and promote healthy growth.

Image Credit: Diverse Stock Photos (Flickr)

Will Bankrupt Revlon Get a Makeover from a Self-Directed Investor Frenzy?

The 80% increase in Revlon’s (REV) price Tuesday (June 21) shows that strong influence remains in the hands of retail investors. The company, which declared bankruptcy last week, is now up 461% since that announcement. At play is the same social media communication network that helped drive up GameStop (GME) in early 2021, provided capital to AMC Theaters (AMC), and elevated values of cruise lines that sat mostly idle during the pandemic. This time, it’s again with a household name that was getting a large amount of short-seller attention.

Revlon hit a low last week of $1.08 and has since rocketed up to $6.06 which it hit yesterday (June 21). The impetus seems to have begun with a Reddit post.  A member of r/wallstreetbets compared the current setup in Revlon to Hertz (HTZ) in 2020, noting that the company has an iconic 90-year-old brand and also has a high short interest of 37%. Today, Revlon’s short interest as a percentage of the total float increased to more than 50%, and Fintel identified the company as a top short-squeeze candidate.

The Reddit post asked, “Is there a chance [Revlon] becomes a meme stock?”

Source: Koyfin

The strong buying by self-directed individual investors is reflected as it’s one of Fidelity’s top ten-traded tickers. The broker showed Revlon as the ninth most popular stock traded by their customers on Tuesday, with buying pressure outweighing selling pressure.

Image: upikatruuu (r/wallstreetbets)

Hertz was able to quickly resolve its bankruptcy as its market value and access to capital increased and protection from lenders allowed it to shed over $5 billion in debt.

This is a possible attempt to replicate the magic of Hertz, which soared nearly ten-fold in June 2020 after the company filed for bankruptcy, this activity could provide Revlon with more options.

For now, the stock is acting in a similar fashion to Hertz and other meme stocks. The rally has been intense and supported by volume. The company is using the bankruptcy process to reorganize its capital structure as it has high debt and struggles with declining sales due to people staying inside during the pandemic, the continued work-from-home environment, and competition from Kim Kardashian West and Kylie Jenner’s makeup brands, among others.

One unanswered question equity investors in Revlon may wish to resolve, is if Revlon’s equity holders will be left with anything after the bankruptcy proceedings or if the courts and company prioritize paying back notes and other loans. For now, retail investors are betting there might just be some equity value remaining, and that momentum carries the stock price even higher.

Paul Hoffman

Managing Editor, Channelchek

Suggested Content

Is it Game-Over for Meme Stock Investors?

Exposure to Non-Travel Leisure Stocks

You Can Own a Piece of r/wallstreetbets

Michael Burry Uses Burgernomic’s Logic to Evaluate the US Dollar

Sources

https://investors.revlon.com/news-releases/news-release-details/revlon-takes-step-towards-reorganizing-capital-structure-company

https://www.bloomberg.com/news/articles/2022-06-16/revlon-files-for-bankruptcy-facing-high-debt-supply-chain-pain

https://www.reddit.com/r/wallstreetbets/comments/vdx78t/what_do_we_think_of_revlon/

https://www.vandatrack.com/

https://eresearch.fidelity.com/eresearch/gotoBL/fidelityTopO

https://investorplace.com/2022/06/revlon-is-bankrupt-what-comes-next-for-rev-stock/

https://markets.businessinsider.com/news/stocks/revlon-stock-price-chapter-11-bankruptcy-meme-stock-retail-investors-2022-6

Stay up to date. Follow us:

Thursday, June 16, 2022

Vera Bradley (VRA)
Shares in the Discount Bin; Initiating Coverage with An Outperform Rating

Joe Gomes, Senior Research Analyst, Noble Capital Markets, Inc.

Joshua Zoepfel, Research Associate, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

Initiating Coverage. We are initiating research coverage on Vera Bradley, Inc. with an Outperform rating and an $8.00 12-month price target. Vera Bradley is the owner of two unique lifestyle brands. With the recent overall market sell-off, VRA shares are selling at all-time lows, outside of the COVID induced panic in mid-2020. With significant organic and inorganic growth opportunities, we believe VRA shares present an attractive risk/reward situation.

The Brands. The iconic Vera Bradley brand is a leading designer of women’s handbags, luggage and other travel items, fashion and home accessories, and unique gifts. The Company operates through a network of retail, wholesale and e-commerce sites. Pura Vida is is a rapidly growing, digitally native lifestyle brand. The Pura Vida brand has a differentiated and expanding offering of bracelets, jewelry, and other lifestyle accessories….

This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision. 

Image Credit: Teodor Savin (Pexels)

Cannabis Tourism: How a New Travel Trend is Taking Off

Legal cannabis consumption rose in the US and Europe during the COVID pandemic, with some people turning to marijuana to help them cope with lockdowns and broken routines. Meanwhile, fewer people today view the drug as harmful compared to previous decades.

These factors may have contributed to a trend toward cannabis-related tourism, with destinations developing new holiday products to tempt customers and rising travel bookings to destinations where cannabis is legal. But there are risks for both destinations and tourists in embracing this trend.

Work by MMGY Travel Intelligence found that 29% of leisure travelers are interested in cannabis-related tourism. A study by the Dutch government revealed that 58% of international tourists choose Amsterdam in order to consume drugs. And business in Dutch coffee shops has increased since the start of the pandemic.

Nine months after Illinois legalized recreational cannabis in January 2020, nearly 30% of purchases were by non-residents. Thailand has just announced it has legalized cannabis and is hoping this will boost tourism.

The tourism sector and specific destinations have reacted quickly to the demand for cannabis, hemp, and CBD-related products by designing experiences that include those elements. They are also responding to the expected economic potential related to increased hotel occupancy, tax revenues, increased land values, business expansion, jobs, and public health and safety benefits that could be connected to cannabis sales.

Yet, although tourism to other destinations with legalized cannabis is growing in popularity, data is only beginning to be collected. And so far, no destination is ready to be labeled as the “next Amsterdam”.

Big Potential

While cannabis-related travelers are believed to be high-spending and well-educated, authorities don’t want to replicate the Dutch model, which led to a massive concentration of cannabis coffee shops in Amsterdam and raised concerns over hard drug use and criminality.

New business models are focusing on agri-tourism (meet-the-farmer sessions) and culinary tourism, and events such as cannabis festivals. Tourists can choose from farm tours, “bud and breakfast” hotels, city tours, cannabis festivals, cannabis trails, food, wine and marijuana pairings, “ganja yoga,” and packages that combine accommodation and cannabis experiences.

The potential for cannabis tourism is widespread around the world. More than 19 US states and Washington DC have now legalized recreational cannabis, along with Canada, Mexico, Uruguay, and others. In Europe, Luxembourg allows the consumption of personally cultivated cannabis, while Switzerland is trialing cannabis sales from pharmacies for recreational purposes.

Malaysia and Thailand have made initial steps toward legalizing recreational use. Costa Rica and Morocco have also approved legalization for medicinal purposes.

Risks for Tourists

However, few countries have clarified the legality of cannabis use by tourists with legislation directed at recreational use by residents. This means tourists risk breaking the law unintentionally by interacting with street dealers and police as well as the health implications of consuming real and fake drugs.

There is some evidence cannabis can improve some mental health conditions and provide pain relief. But tourists with pre-existing mental health disorders, for example, may risk their physical and psychological wellbeing. Cannabis-related mental health events, including depression, can also occur among those who have not been diagnosed with mental health issues.

A patchwork of complicated laws and regulations regarding recreational cannabis use by overseas tourists means questions remain about the legality of consumption, the transport of cannabis vape pens overseas as well as issues of insurance cover and health care during and after travel.

While Uruguay is planning to allow consumption by tourists, countries like Portugal, where cannabis has been decriminalized since 2001, still doesn’t allow them to buy it legally. In Spain, cannabis clubs allow visitors to donate to the club instead of purchasing a product. But Spain and other large markets like South Africa are focused on domestic cannabis tourism rather than international visitors.

Few countries have carried out a cost-benefit analysis around legal cannabis and tourism or fully discussed issues of land and water use, police powers, and benefits to local communities. While cannabis tourism can generate tourism and jobs, and reduce the power of organized crime, the goal of sustainable development is threatened by theft, racism, and a market stacked against small local operators who often can not secure funding or insurance. There are also possible increases in pollution and public health and safety concerns.

Mexico and Canada have promised funding for indigenously owned businesses to aid social and racial equality, while New York plans to create a US$200 million (£162 million) public-private fund to support social equity goals. Resident support and continual conversations with communities on how to plan the sustainable development of cannabis tourism should be a vital part of the development of the sector.

While it appears that the COVID pandemic helped stimulate and legitimize the use of marijuana, with dispensaries declared an essential service in parts of the US during the pandemic, tourism could expand and normalize acceptance of its use.

Perceived risks may fade and tourist guilt may dissipate. Cannabis tourism is likely to become just another segment of the holiday industry.

This article was republished with permission from The Conversation, a news site dedicated to sharing ideas from academic experts. It was written by and represents the research-based opinions of Michael O’Regan, Senior Lecturer in International Tourism Management, Swansea University.

Suggested Reading

There’s a Reason the Marijuana Industry’s M&A is Just Beginning

The Cannabis Path to Legalization and its Implications for Psychedelics

Virtual Roadshow – Schwazze (SHWZ) – Register Now for June 23rd

GABY (GABLF) NobleCon18 Presentation Replay

 

Stay up to date. Follow us:

ACCO Brands Corporation Announces Participation in Virtual 2022 East Coast Ideas Conference

Research, News, and Market Data on ACCO Brands

06/09/2022

LAKE ZURICH, Ill.–(BUSINESS WIRE)– ACCO Brands Corporation (NYSE: ACCO) today announced that its management will participate in the virtual 2022 East Coast IDEAS Investor Conference. The company’s virtual presentation will be available on June 16 at 8:00 a.m. EDT.

The presentation will be webcast and will be accessible through the Investor Relations section of 
www.accobrands.com, through the conference website 
www.threepartadvisors.com/east-coast, and through the host’s main website www.IDEASconferences.com. The presentation will be archived for 90 days following the event.

About ACCO Brands
Corporation

ACCO Brands Corporation (NYSE: ACCO) is one of the world’s largest designers, marketers and manufacturers of branded academic, consumer and business products. Our widely recognized brands include Artline®, AT-A-GLANCE®, Barrilito®, Derwent®, Esselte®, Five Star®, Foroni®, GBC®, Hilroy®, Kensington®, Leitz®, Mead®, PowerA®, Quartet®, Rapid®, Rexel®, Swingline®, Tilibra®, Wilson Jones® and many others. Our products are sold in more than 100 countries around the world. More information about ACCO Brands, the Home of Great Brands Built by Great People, can be found at www.accobrands.com.

View source version on 
businesswire.com: https://www.businesswire.com/news/home/20220609005383/en/

Neal Fenwick
Investor Relations
(847) 796-4740

Julie McEwan
Media Relations
(937) 974-8162

Source: ACCO Brands Corporation