Obesity in the age of Ozempic; Bed Bath & Beyond Has More Stock to Sell; Reader feedback on timeshares; Berkshire Hathaway annual meeting is a month from today
1) Following up on yesterday's e-mail about the new weight-loss drugs, this Vox article captures a lot of the nuances around them: Obesity in the age of Ozempic. Excerpt:
Even with the unknowns, Klein says, people "need to get their heads out of the sand. We know very much that even moderate weight loss can prevent and improve obesity related-diseases. It improves medical health, quality of life, and the ability to be physically active and interact in activities with family and friends."
As researchers try to untangle how all this works, and patients' conceptions evolve, society's "warped idea" about obesity remains stubbornly in place, journalist Evette Dionne, author of a "fat liberation" memoir, wrote recently. "It is objectively a good move to unlink the idea of moral virtue from fatness. However, in these attempts to complicate our cultural understanding of fatness, the remedy remains the same: lose weight rather than changing the ways in which our society interacts with and treats fat people."
Caught in the middle of the debates are patients who would like to lose weight for myriad health and personal reasons, which may have nothing to do with how they look.
Those reasons can span medical conditions, such as diabetes, to simply wanting to play a sport or with their kids on the playground, to not feeling out of breath when bringing in the groceries, Marian Tanofsky-Kraff, a clinician-researcher at the Uniformed Services University in Maryland, says. But, she adds, "Many of my patients have told me their desire to lose weight due to reasons other than appearance is somehow slowing the fat acceptance movement and they feel invalidated and guilty."
Juneja has come to her nuanced view by reconciling her embrace of body positivity with taking the drugs. Acceptance is not resignation; people can love and accept their bodies while also wanting the health benefits that come with weight loss, she says.
"While I agree that there's an obsession with thinness in our culture, some of us do have health challenges that losing weight helps with ... which is hard to do with just diet and exercise," Juneja told me. "And it's such a gift to be able to get ahead of things like diabetes."
Yukich sees the drugs as something entirely apart from the diet culture she was so steeped in. "What I seek is a healthy me and while I will never be 132 pounds weighing in on the Biggest Loser stage again, I am the healthiest version of myself today and am more happy than I ever have been."
2) In my February 9 e-mail, I warned my readers about the deal dying retailer Bed Bath & Beyond (BBBY) struck with a consortium of hedge funds:
After doubling on Monday and getting cut in half on Tuesday, Bed Bath & Beyond fell another 13% yesterday as investors digested the deal the company struck with a consortium of hedge funds, led by Hudson Bay Capital Management.
Simply put, the company gave the hedge funds the right to, as Wall Street insiders say, "rip the faces off" of retail investors, in exchange for a lifeline that lets the company avert an immediate bankruptcy and likely liquidation.
Bed Bath & Beyond closed that day at $2.60, down 91% from its 52-week high reached last August.
To some speculators (I can't call them investors), a stock down so much might have appeared cheap but, exactly as I warned, it wasn't.
In less than two months since then, Bed Bath & Beyond has fallen another 87% to close yesterday at $0.34.
So is it finally cheap now? Of course not... it's a ZERO!
This is bad enough, but lots of companies go bankruptcy, leaving shareholders with nothing. What really makes me angry here is that, in a futile attempt to delay the inevitable by a couple of months, Bed Bath & Beyond conspired with sophisticated investors to defraud naïve retail investors to the tune of $360 million – and the SEC let it happen right under its nose!
Bloomberg columnist Matt Levine analyzed the details in his March 30 missive: Bed Bath & Beyond Has More Stock to Sell. Excerpt:
A very crude estimate would be that if Hudson Bay bought 321 million shares at $1.16 and sold them at $1.43, it made about $84 million on the deal. Bed Bath and Hudson Bay teamed up to sell about $444 million worth of stock; Bed Bath got about 80% of that money and Hudson Bay kept 20%. Today's replacement at-the-market offering includes a 3% commission for B. Riley, which is less.
Also that 311 million shares are almost three times as many shares as it had outstanding before the Hudson Bay deal: Roughly 73% of Bed Bath's shares outstanding were issued in the last two months as part of this deal.
Also that 311 million shares are a bit more than five days' volume in the stock: Since the Hudson Bay deal was launched, Bed Bath's stock has traded about 58 million shares a day. If Hudson Bay was selling consistently during that time, it was selling about 15% of the volume every day.
One other point. On this math Hudson Bay has bought roughly 73% of Bed Bath's stock, 311 million out of its 428 million shares outstanding. U.S. securities law requires investors to disclose their share ownership – on Schedule 13D or 13G – within 10 days after they get above 5% of a company's stock. Hudson Bay has never filed a 13D for Bed Bath; it doesn't even show up on Bloomberg's holders list. Hudson Bay may have bought almost 311 million Bed Bath shares, but it didn't keep them for long; it was selling them as fast as it could get them.
3) Speaking of scams about which I've warned my readers, in my March 21 e-mail, I wrote:
Kudos to comedian John Oliver for this scathing exposé of the timeshare industry.
I knew that buying a timeshare was almost always a terrible idea, but didn't fully appreciate how terrible – and wasn't at all aware of an equally predatory industry that's sprung up as a result: businesses offering to get you out of your timeshare contract (for a fee of course).
In response, a number of readers wrote to share their experiences, and I wanted to share two of them...
Phil J. has had a good experience with three timeshares – because he bought two of them for a pittance from desperate sellers:
Hi Whitney, I thought I'd give you my "2 cents worth" about timeshares. We own three of them, all at Big Sky, Montana. I was originally against the idea but it has actually been good for us. My wife and her deceased first husband paid about $7,000 for the first one 30+ years ago – a lot of money then.
However, they felt it was a "forced vacation" as they never went otherwise. We have since bought two more: one for $100 and one for $500 – people just wanted out of their ownership so sold to us for almost nothing.
Yes, the maintenance fees sting – they're around $1,700/unit/week now, but it's still very reasonable compared to any other housing up on the mountain. We usually use a couple of the weeks to ski and use one week in Aug/Sep to bring horses and ride in and around Yellowstone Park. We have exchanged our units quite a few times and stayed in resorts much fancier than we would ever pay for normally – we're budget travelers. I like the fact that we don't have any maintenance to do when we show up.
I'm not sure if our kids are going to want them someday as they're still living on tight budgets and skiing at Big Sky is getting very expensive, but if we just want to get out of our ownership, we can simply deed them back to the condo association. I will agree however, that they are difficult to sell.
But if you bought cheap like we did, deeding them back is a pretty nice option.
I appreciate your news letters.
Meanwhile, Herbert H. had a more typical experience:
Back in the 1980's I bought a Bluegreen Vacations timeshare that was based on points. It turns out the points I had were only good for a few vacation spots during their low season. So 35 years ago I started trying to get out. But BlueGreen told me that a feature of their timeshare was that I owned it for life, and that my heirs would take it over when I died. Meaning they would have to pay $800 – $1000 a year in maintenance fees.
I did contact some firms that advertised that they could get me out of the contract. They wanted a lot of money, and didn't guarantee a result. I managed to dodge that bullet.
Just recently, my wife stumbled over a "Timeshare Users Group" posting that had an article showing that Bluegreen had finally put into a place a department that would take back my timeshare. I didn't get any of my "equity" back, but it didn't cost me anything and I'm finally free of those darn maintenance fees.
Thank you, Phil and Herbert, for sharing your experiences!
4) The Berkshire Hathaway (BRK-B) annual meeting (aka, the Warren and Charlie Show), which I'll be attending for the 26th consecutive year, is taking place exactly a month from today in Omaha, Nebraska. See my March 28 e-mail for more information about tickets, flights, lodging, car rentals.
I'll be hanging out at the bar on the main floor at the Hilton Omaha at 1001 Cass Street, directly across the street from the site of the meeting, the CHI Health Center, on Friday and Saturday from 4 p.m. until at least 10 p.m.
We're getting closer and closer... So if you're coming to Omaha, please stop by and say hi!
Best regards,
Whitney
P.S. I welcome your feedback at WTDfeedback@empirefinancialresearch.com.
P.P.S. The Empire Financial Research offices are closed tomorrow in observance of Good Friday. Look for my next daily e-mail in your inbox on Monday, April 10.