SoFi Blog

Here’s Geoffrey!

Toys “R” Us closed all of its stores after filing for bankruptcy in 2018. The iconic toy store brand ultimately failed as a business after taking on a substantial amount of debt during a buyout that took the company private.

Now the Toys “R” Us brand is making a comeback through a partnership with Macy’s (M). Toy stores ranging in size will open inside existing Macy’s over the coming months, offering unique experiences such as photo opps with a life-sized Geoffrey the giraffe and toy demonstration tables.

Failure to Relaunch

Since Toys “R” Us first shuttered its doors several years ago, several unsuccessful comeback attempts have been made. The Macy’s partnership came to be after WHP Global bought the Toys “R” Us brand from Tru Kids Inc., which originally acquired it in a liquidation sale. Tru Kids Inc. had opened some stores in Texas and New Jersey, but they were closed in early 2021 amid the pandemic.

Macy’s agreed to sell Toys “R” Us products on its website just under a year ago, which was around the time when ToysRUs.com also started selling items. Macy’s also opened 400 “shops-within-shops” at its US department stores.

Competitive Toy Market

The Toys “R” Us partnership has benefited Macy’s. Within its first-quarter earnings report, Macy’s said its toy sales were 15% higher than the comparable period, dating back to before the Toys “R” Us deal.

It’s been a relatively strong 2022 for Macy’s, which has outperformed its competitors, such as big-box retailers Target (TGT) and Walmart (WMT). For many American families, going to Toys “R” Us was a rite of passage around the holidays. Macy’s hopes that tradition can continue — within its own doors.

Please understand that this information provided is general in nature and shouldn’t be construed as a recommendation or solicitation of any products offered by SoFi’s affiliates and subsidiaries. In addition, this information is by no means meant to provide investment or financial advice, nor is it intended to serve as the basis for any investment decision or recommendation to buy or sell any asset. Keep in mind that investing involves risk, and past performance of an asset never guarantees future results or returns. It’s important for investors to consider their specific financial needs, goals, and risk profile before making an investment decision.
The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. These links are provided for informational purposes and should not be viewed as an endorsement. No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this content.
Communication of SoFi Wealth LLC an SEC Registered Investment Adviser
SoFi isn’t recommending and is not affiliated with the brands or companies displayed. Brands displayed neither endorse or sponsor this article. Third party trademarks and service marks referenced are property of their respective owners.
SOSS22072002

Deal on the Rocks

This past Friday, the world’s richest man Elon Musk told the SEC he was looking to pull out of his $44 billion deal to purchase Twitter (TWTR). Following a hostile takeover bid this spring, Musk had negotiated a price and announced his intention to take the social media platform private.

Since then, a snag emerged when Musk claimed Twitter had failed to provide enough information concerning so-called “bots” or fake accounts. A legal battle is now expected, continuing a wild saga that first kicked off in April after Musk announced he had acquired a 9% stake in the company. Musk, CEO of Tesla (TSLA), sold stock he owned in the EV maker after the terms of the Twitter deal had been reached.

Who Is Most Affected

While evaluating the fallout from the canceled deal, it’s possible Musk ends up being required to pay more than the $1 billion breakup fee that was negotiated as part of the agreement. This could involve a settlement of some kind. The most extreme result would arguably be if a judge forced Musk to buy Twitter at the previously agreed upon price of $54.20 per share. This is especially true because some of his financial backers might also back out.

Other groups left in the lurch include Twitter’s workforce, as their employer is now tied up in legal proceedings without a clear outcome. Twitter’s board of directors is also thrust into a messy situation, after they initially tried to rebuff Musk’s takeover attempt with a poison pill strategy.

Forecasting Twitter’s Future

The first order of business for Twitter will be navigating the impending legal proceedings, as the social media giant intends to sue Musk, and hired merger law heavyweight Wachtell, Lipton, Rosen & Katz. In the meantime it’s possible distracted employees are less productive or choose to leave for different jobs.

Some industry observers say Twitter has been weakened by the highly-public negotiations, as well as the perception it has too many fake accounts. It’s possible the company seeks out a new buyer in an attempt to turn things around, but regulators have been strict about mergers, making the process challenging. It’s also hard to find buyers with deep enough pockets. Twitter will be forced to focus on rebuilding its business, all while listening closely to what its lawyers have to say.

Please understand that this information provided is general in nature and shouldn’t be construed as a recommendation or solicitation of any products offered by SoFi’s affiliates and subsidiaries. In addition, this information is by no means meant to provide investment or financial advice, nor is it intended to serve as the basis for any investment decision or recommendation to buy or sell any asset. Keep in mind that investing involves risk, and past performance of an asset never guarantees future results or returns. It’s important for investors to consider their specific financial needs, goals, and risk profile before making an investment decision.
The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. These links are provided for informational purposes and should not be viewed as an endorsement. No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this content.
Communication of SoFi Wealth LLC an SEC Registered Investment Adviser
SoFi isn’t recommending and is not affiliated with the brands or companies displayed. Brands displayed neither endorse or sponsor this article. Third party trademarks and service marks referenced are property of their respective owners.

SOSS22071201