Retail industry is one of the most crucial elements in people’s lives. Today, Amazon (NASDAQ: AMZN), Walmart (NYSE: WMT) and more walk this ground proudly. Recently, a Dallas-based retail organization, Tuesday Morning Corporation (NASDAQ: TUEM), was planning to go private. The entity was listed on NASDAQ stock exchange on May 25, 2022. TUEM Stock has lost the majority of its value since its August 2022 high.
Company’s Second Attempt to File Bankruptcy
According to the local news media, the company revealed the need for cash. They are planning to delist from the stock exchange and have already informed Nasdaq. They will inform the US financial watchdog, Securities and Exchange Commission (SEC), on Monday.
This was the second time the company filed for bankruptcy in a couple of years. Their decision to reduce the senior management in association with lower than expected sales forecast led the CEO to stepping off the position in November 2022. They were already struggling before the covid strike following leadership challenges and rising competition in the market.
Tuesday Morning generated $157.11 Million in revenue during the third quarter. Company’s net operating loss has remained the same since the previous earnings reveal, though it was less during Q1 2022. Overall revenue has declined by over 11% year on year while operating expenses have risen. Their net income has gone down by over 90% in a year.
In September 2022, Ayon Capital and Retail Income Ventures came to the company’s rescue and offered $32 Million in convertible debts, meanwhile another $3 Million came from Tuesday Morning management. According to the deal, the firm was required to sell Pier 1 Import products using a licensing agreement. Tuesday Morning is among the most popular retail chains in Dallas with 487 stores operating under their command.
TUEM Stock Price Analysis
The shares have lost 97% value since its August 2022 peak. The company announced the stock split in November 2022, leading to a decline in stock price by over 20% on the day. The value has denied the regression trend which points toward potential buying interest in the shares. RSI indicates the price has entered the oversold zone but it is unlikely that the market will see more buyers entering the market.
The company has a long and difficult path ahead, especially with the presence of industry mammoths like Amazon. The retail giant accounted for over half the sector sales online during 2021. Retail industry is a major contributor to the employment sector in the United States with 5.7% of the country’s GDP generated via this market.
Covid had an effect on the market too. According to the United States Bureau of Labor Statistics, the retail industry lost around 800,000 jobs in 2020. However, e-commerce generated 300,000 jobs during 2019 and 2020.
Disclaimer
All the views in this article belong solely to the author and do not reflect any investment advice.
Source: https://www.thecoinrepublic.com/2022/12/29/how-much-zeal-is-left-in-tuem-stock-as-company-nears-bankruptcy/