The Retail Implosion

Yesterday it was Walmart’s turn. Today it’s Target. Shares of Target are down over 24% today. The company reported earnings of $2.19 per share which was well below estimates of $3.06 per share.

Stocks like Costco and Amazon have been falling for several months but have been getting worse lately. Costco is off 11% today. Walmart is down again today. Most anything in retail is having a hard time, especially the stores that cater to lower-income shoppers.

BJ’s Wholesale Club is down 16% today. Both Dollar Tree and Dollar General are down over 10% today. Best Buy, Kohl’s and Five Below are at 52-week lows.

This is a mess and it’s due to inflation. When prices go up, that alters consumers’ behavior. They cut back in the higher-priced areas and put off purchases for another time.

The Elon Musk-Twitter deal is in serious jeopardy. Musk appears to be balking at the deal. He’s also raised the issue of bot accounts but that doesn’t seem to be something that could have just occurred to Musk in the last few days. That’s a long-standing issue at Twitter.

Twitter has said that it will hold Musk to his offer of $54.20 per share. The stock is now around $37 per share.

Last week, Musk said that the deal is “temporarily on hold.” He said he wanted more info on Twitter’s claims that less than 5% of its accounts are fake. It looks like Musk is getting cold feet and he’s using the bot issue as his escape clause.

Posted by on May 18th, 2022 at 12:07 pm


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