September 2022 Mid-Month Update: A Buyback Special

  • September 16, 2022
We discussed the macro economic environment in our Buyback Wednesdays post this Wednesday and the idea I want to discuss for this mid-month update will likely be impacted by the macro environment despite the very attractive valuation of the company and a huge stock buyback the company announced. Build-A-Bear Workshop (BBW) $14.07 Build-A-Bear Workshop (BBW) announced a $50 million buyback when it reported fiscal Q2 2022 results on September 1. While small in absolute terms, considering the company’s market cap was only $230 million at announcement, the buyback represented nearly 22% of the company’s market cap. This buyback comes at the heels of another $25 million buyback that was announced in November 2021 and was recently completed. In addition to these buybacks, the company also paid out a special dividend of $1.25 per share last December. BBW is clearly a shareholder friendly company and appears to be listening to Cannell Capital, a Wyoming based activist investment firm that filed a 13D and sent a letter to the Board of Directors urging them not t0 just buyback shares but consider using leverage to do so. A graphic from their letter is given below. Carlo Cannell likes to use strong language in his...

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