Raphael Stevens

Dream on Me’s win is only tentative and could very well be clawed back if Bed Bath & Beyond receives a higher bid at an upcoming auction for all of Buy Buy Baby’s assets.  
Everyday Health Media was selected as a backup bidder. 
Since it declared bankruptcy in late April, Bed Bath & Beyond has been determined to sell its assets at the highest price possible.

“Store Closing” signs at a Buy Buy Baby store in the Brooklyn borough of New York, on Monday, Feb. 6, 2023.
Stephanie Keith | Bloomberg | Getty Images

A little-known baby retailer based in Piscataway, New Jersey, has tentatively won the auction for the intellectual property of Bed Bath & Beyond’s crown jewel Buy Buy Baby, court records filed Thursday say. 
Dream on Me Industries, which sells cribs, strollers and other baby goods through a host of retail partners, won the rights to assets such as Buy Buy Baby’s trademark and domain after an auction Wednesday, according to the records. The price of the winning bid was not disclosed.

Wednesday’s auction was only for Buy Buy Baby’s intellectual property, after its parent company Bed Bath & Beyond decided to split up the sale process in an apparent effort to secure a higher bid price. Another auction for all of Buy Buy Baby’s assets, including its many stores, will be held July 7, the records say. 
Dream on Me’s win is only tentative. If Bed Bath & Beyond receives a higher bid at the upcoming auction, it could lose the rights to Buy Buy Baby’s intellectual property.
Everyday Health Media, a digital media company that produces health and wellness content, was selected as a backup bidder. 
Since it declared bankruptcy in late April, Bed Bath & Beyond has been determined to sell its assets at the highest price possible. The company has repeatedly pushed back several auctions as it worked to secure buyers. 
Interest has centered around Buy Buy Baby, long considered the most valuable part of Bed Bath & Beyond’s business. But the sale process is increasingly uncertain after doubts grew in the days ahead of the auction about the number and size of bids, CNBC previously reported.
The company already offloaded its namesake banner to Overstock.com for $21.5 million. The e-commerce retailer, which plans to change its website name to Bed Bath & Beyond, opted out of acquiring Bed Bath’s stores and inventories. More

Shares of Overstock.com rocketed nearly 20% higher Thursday.
The e-commerce home goods retailer announced it would change its website’s name to Bed Bath & Beyond.
Overstock CEO Jonathan Johnson told CNBC’s “The Exchange” that the Bed Bath & Beyond name better aligns with the company’s products and maintains good brand awareness.

Overstock.com CEO Jonathan Johnson, June 29, 2023.
Scott Mlyn | CNBC

Shares of Overstock.com rocketed nearly 20% higher Thursday, a day after the e-commerce home goods retailer announced it would change its website’s name to Bed Bath & Beyond after buying up the fallen retailer’s intellectual property and digital assets via a bankruptcy auction.
Shares closed the session north of $30 per share, giving Overstock a market valuation of roughly $1.3 billion.

Overstock CEO Jonathan Johnson said the Overstock name reflected the company’s prior liquidation-based model and didn’t align with the type of products it now sells.
“We started out 20-plus years ago as a liquidator and became a general merchandiser. Now we’re a home furnishings and furniture company and there [were] a lot of headwinds with the name Overstock, headwinds with customers who were confused who we were and what we were selling, headwinds with suppliers that didn’t want to necessarily sell if it was associated with liquidation,” Johnson told CNBC’s “The Exchange.”
Bed Bath & Beyond maintains strong brand awareness, Johnson said, despite mismanagement and eventual bankruptcy.
The brands already share overlapping customers, Johnson said, which will help ease the transition.
“We’ll do this transition slowly where the Overstock customer will come to the new website and will recognize it, but so will the Bed Bath & Beyond customer. And then over time, we’ll sunset out the Overstock feel,” he added.

Johnson said shoppers can expect Bed Bath & Beyond’s famed coupons to live on, at least during a transitional period, but noted on a call with analysts earlier Thursday that the company will not offer as many or as deep discounts over the long term.
“One thing that Bed Bath & Beyond customers will realize is that our non-coupon price is really good. And I think people will be very surprised with the deals that Overstock and now Bed Bath & Beyond is able to offer and has been offered,” he said.
The new Bed Bath & Beyond website is set to be relaunched in Canada within the next week, with a subsequent rollout of a website, mobile app and loyalty program in the U.S. expected in the coming weeks.
Overstock shares are up almost 60% so far this year.

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Overstock.com shares surge after announcing website rebrand to Bed Bath & Beyond. More

Bed Bath & Beyond has selected the successful bidders for 109 of its store leases, and Burlington Stores will win the lion’s share.
The off-price giant is slated to take over 50 former Bed Bath & Beyond locations for $13.53 million.
Michael’s, Haverty, Macy’s and Barnes & Noble were among the other winners.

A Burlington and a Bed Bath & Beyond store.
Getty Images

Bed Bath & Beyond locations across America will soon be replaced by Burlington Stores outposts and a range of other businesses, after the failed home goods retailer auctioned off its leases as part of its bankruptcy proceedings, court records show. 
The doomed big-box store selected bidders for 109 of its leases after a Monday auction. Off-price giant Burlington agreed to take over 44 of the locations for $12 million, the largest share of the leases, records filed late Tuesday show. 

Burlington secured six more leases for $1.53 million outside the auction process, bringing the total number of locations to 50 for $13.53 million, records show. 
Many of the locations are considered “top notch,” said Bill Read, executive vice president of commercial real estate firm Retail Specialists. Bed Bath’s lease auction provided retailers in growth mode an opportunity to snag space in prime locations amid a dearth of quality commercial real estate.
“In aggregate, the Bed Bath & Beyond locations were some of the best that I’ve seen become available. They’re usually in large community centers with Target as an anchor and multiple other desirable anchor tenants in the shopping center,” Read told CNBC. 
“These are generally in well-established, mature markets that have a proven track record of generating high sales,” he continued.

Several other retailers snatched up the leases. Here’s a list of the top winners: 

Burlington Coat Factory: 50 leases for a total price of $13.53 million.
Michael’s: Nine leases for $2.55 million.
Haverty: Four leases for $468,334.

The other winners include grocers, premium furniture stores and discounters. Macy’s paid $1.2 million for a lease in ritzy Winter Park, Florida, for a potential Bloomingdale’s location, and Barnes & Noble secured a lease in Concord, North Carolina, for $129,015. 
Landlords apart from those companies won 37 of the leases, the next-largest portion after Burlington. Those landlords can now find their own tenants and potentially get a higher rent price than they’d be able to within the auction process.
The leases are for both Bed Bath & Beyond and Buy Buy Baby locations. Leases for the Buy Buy Baby outposts could be clawed back depending on what happens at an auction for the chain’s assets, Bed Bath & Beyond said in a court filing. 
The leases sold are for stores that range in size from 14,000 square feet all the way to 92,000 square feet. 
Bed Bath & Beyond raked in $24.41 million from the lease auction. A portion of those proceeds will likely go to unpaid rents at the locations and the rest will go to Bed Bath & Beyond to pay the retailer’s many creditors. 
When Bed Bath & Beyond filed for bankruptcy in late April, the retailer had 468 leases to its name, and 153 of them were brought to auction earlier this week, records show. Successful bids went through for only 109 of them.
The retailer had said in court filings that another wave of lease auctions could take place. It is unclear if that process is underway or what will happen to the additional leases that weren’t auctioned off this week. 

Retail bankruptcies and off-price expansion

The influx of available stores comes as vacancy rates for shopping centers fell to 5.6% in the first quarter of this year, the lowest level since commercial real estate firm Cushman & Wakefield began tracking in 2007.
The lack of available retail space can hinder companies looking to expand. But retail bankruptcies can provide a unique opportunity to snatch space they couldn’t otherwise access.
When Burlington reported earnings for the three months that ended April 29, the company noted it planned to open 70 to 80 net new stores in fiscal 2023. It aimed to open even more in the coming years. 
During a call with analysts, CEO Michael O’Sullivan said the company had its eye on “retail bankruptcies.”
“We think these bankruptcies are likely to have a significant impact on the availability of attractive new store locations … we’re confident that these bankruptcies will strengthen our new store pipeline,” said O’Sullivan. 
“We hope in 2024 and 2025, some of the availability that we’re seeing from retail bankruptcies will give us the opportunity to open more,” he added.
Burlington’s decision to buy Bed Bath & Beyond’s leases wasn’t its first foray into bankruptcy-run lease auctions, the chief executive said on the call. 
“We have a very strong real estate team that has a lot of experience dealing with retail bankruptcies. Many of our most successful and productive stores today were once upon a time Circuit City, Toys R Us, Sports Authority, Linens ‘N Things,” said O’Sullivan, rattling off a series of other failed retailers that came before Bed Bath & Beyond. 
“Some of our best stores were created from carved-up Kmart or Sears locations,” he added.
Read, the executive vice president with Retail Specialists, said it’s “no surprise” Burlington was the top bidder for Bed Bath & Beyond’s leases. 
“Burlington is in aggressive growth mode, these are fantastic locations and they’re getting a lot of value for their dollar,” Read said. “Companies like Ross and TJX already have enough stores in their fleet that they didn’t have to be as aggressive in an auction to get new stores, but it’s perfectly reasonable for Burlington to be aggressive to reach their store count desires.”
Read added, “They’re getting reasonable rents, they’re getting great locations, they’re getting great co-tenancy and they’d probably be in a bidding war with other retailers at higher rents for these locations if it was outside of an auction.” More

The Justice Department charged a former Pfizer employee and his friend with illegally trading shares based on non-public trial results on the Covid antiviral pill Paxlovid. 
The Securities and Exchange Commission announced its own insider trading charges against the former employee, Amit Dagar, and his friend, Atul Bhiwapurkar.
Amit Dagar, who helped manage and analyze certain clinical trial data, and Bhiwapurkar sold their Pfizer call options at “significant profits” totaling more than $350,000. 

Resurgence of COVID-19 symptoms in patients treated with the drug Paxlovid appeared far more common than has been reported, doctors found in a study detailed in the New England Journal of Medicine.
Chris Sweda | Chicago Tribune | Tribune News Service | Getty Images

Federal authorities charged a former Pfizer employee and his close friend Thursday with illegally trading shares based on non-public trial results on the pharmaceutical company’s Covid antiviral pill Paxlovid.
The Justice Department and the Securities and Exchange Commission both announced respective insider trading charges against Amit Dagar, Pfizer’s senior statistical programming lead at the time of the trades, and his friend Atul Bhiwapurkar.

Dagar, who helped manage and analyze Paxlovid clinical trial data, and Bhiwapurkar “participated in an insider trading scheme to reap illicit profits from options trading based on inside information” about the then-unreleased Paxlovid results in November 2021, according to the DOJ.
The two individuals bought their Pfizer call options a day before the data was made public. Once the trial results were publicized, Dagar and Bhiwapurkar sold their call options and generated “significant profits” totaling more than $350,000, the DOJ said in a release.
“The charges in this case relate to the personal conduct of a former Pfizer employee in violation of the company’s policies,” a Pfizer spokesperson told CNBC. “Pfizer is cooperating with the government’s investigation.”
Dagar, 44, of Hillsborough, New Jersey, was arrested Thursday morning and charged with four counts of securities fraud, each of which carries a maximum sentence of 20 years in prison, the DOJ said. He was also charged with one count of conspiracy to commit securities fraud, which carries a maximum sentence of five years in prison.
Bhiwapurkar, 45, of Milpitas, California, was also arrested early Thursday and charged with two counts of securities fraud and one count of conspiracy to commit securities fraud, according to the DOJ.

Patrick Smith, an attorney representing Dagar, said his client denies the allegations and “looks forward to defending himself in court.”
Smith also said “nobody at Pfizer ever told” Dagar the results of the Paxlovid trial.
Michael Bachner, an attorney for Bhiwarpukar, said his client denies trading on inside information and based his decisions on publicly available information about the efficacy of the drug.
Bhiwarpukar “intends to vigorously defend against these charges,” according to Bachner.
On Nov. 4, 2021, Dagar learned that a mid-stage Paxlovid trial produced positive results a day before they were scheduled to be made public, the SEC’s complaint alleges. 
The trial found Paxlovid reduced hospitalization or death by 89% compared with placebo in non-hospitalized high-risk adults.
Dagar’s supervisor informed him via chat that the trial “got the outcome” and there would be a “press release tomorrow.” Dagar responded with “oh really” and “kind of exciting,” the complaint alleges.  
Within hours of that exchange, Dagar purchased “short-term, out-of-the-money” Pfizer call options. An out-of-the-money call option allows a person to purchase a stock at a price greater than the current market price.
Prior to that day, Dagar had never used his brokerage account to trade in Pfizer options and had not traded the company’s stock since 2018, the complaint alleges.
Dagar allegedly shared the successful results with Bhiwapurkar, who purchased similar call options in Pfizer and tipped off another friend who was not named in the complaint.
Pfizer’s stock price jumped nearly 11% after the company released the Paxlovid data on Nov. 5, 2021.
Dagar, who purchased $8,380 in Pfizer call options, generated a one-day profit of approximately $214,395, the SEC said. That represents an investment return of approximately 2,458%, according to the agency.
Bhiwapurkar, who purchased $7,400 in call options, generated a one-day profit of approximately $60,300, the SEC said. 
The unnamed individual who Bhiwapurkar tipped, generated a one-day profit of approximately $29,770, according to the charges.
“As alleged in our complaint, Amit Dagar misused his access to confidential clinical trial results to enrich himself and his friend, Atul Bhiwapurkar,” Joseph Sansone, chief of the SEC’s Market Abuse Unit, said in a release.
“Dagar and Bhiwapurkar allegedly leveraged this information by trading out-of-the-money call options to generate massive one-day returns. Thanks to our surveillance, the defendants must now face the consequences of their greed,” he continued. More

In the last week of June, the number of homes for sale fell below year-ago levels for the first time in 59 weeks.
New listings in the last week of June were down 29% from the same week a year ago.
Mortgage rates recently crossed back over 7%.

A house for sale, in escrow, in Laguna Woods, California.
Scott Mlyn | CNBC

Anyone out shopping for a home on the resale market knows the pickings are slim. They’re about to get slimmer. 
The number of homes for sale this month was actually 7% higher than June of last year, according to Realtor.com. But, in just the last week, that comparison went negative, with the number of homes for sale falling below year-ago levels for the first time in 59 weeks.

New listings in the last week of June were down 29% from the same week a year ago. That’s a wider drop than previous weeks.
With mortgage rates surging ever higher, crossing over 7% again on the 30-year fixed Thursday, according to Mortgage News Daily, homeowners have very little incentive to sell their homes. The vast majority of homeowners with mortgages have rates below 4%, with some even below 3%.
An even tighter housing market ahead means home prices are unlikely to cool. Prices peaked last June, after rising over 45% from pre-pandemic levels. They began to fall because mortgage rates had doubled in a matter of months. But prices bottomed in January, according to the latest S&P Case-Shiller home price index, despite still higher interest rates and slower sales.
“The ongoing recovery in home prices is broadly based,” Craig Lazzara, managing director at S&P DJI, said in a release.
Pending sales, which measure signed contracts on existing homes, fell nearly 3% in May from April, according to a report Thursday from the National Association of Realtors.

“Despite sluggish pending contract signings, the housing market is resilient with approximately three offers for each listing,” NAR’s chief economist, Lawrence Yun, said in a release. “The lack of housing inventory continues to prevent housing demand from being fully realized.”
On the flip side, the nation’s homebuilders have been big beneficiaries of the tight market, seeing sales jump 12% in May from April, according to the U.S. Census. Higher mortgage rates have been less of a factor, as builders, some of whom have their own mortgage arms, have been buying down rates for buyers. In May, there were twice as many homes that were sold but hadn’t been started as there were a year ago.
While single-family housing starts are finally increasing, they are still well below historical levels. Builders have also been underbuilding since the great recession, meaning the market was undersupplied well before the recent, pandemic-induced run on housing.
“Bottom line, for all the excitement in the home builders because of the need for more supply, the existing home market is depressed and experiencing a serious case of stagflation with little transactions taking place but at still very high prices,” wrote Peter Boockvar, chief investment officer at Bleakley Financial Group. More

Southwest pilots’ labor union asked to be released from federal mediation for a new contract.
The union and the airline have been unable to come to agreements on pay, work rules and other aspects, the union said.
A strike is not imminent, and the two sides could still reach a deal in the coming months.

A Southwest Airlines Co. plane takes off as representatives and pilots from the Southwest Airlines Pilots’ Association (SWAPA) demonstrate outside Chicago Midway International Airport (MDW) in Chicago, Illinois, U.S., on Wednesday, May 18, 2016.
Daniel Acker / Bloomberg / Getty Images

Southwest Airlines pilots’ union said Thursday it sought to be released from federal mediation for a new labor contract, laying the groundwork for a potential strike as talks with the carrier haven’t yet yielded an agreement.
The airline and union, the Southwest Airlines Pilots Association, have been in contract talks for more than three years and negotiations have been tense. The Dallas-based carrier’s pilots voted to authorize the union to call a possible strike last month, a poll that the union called on the heels of a holiday meltdown at the end of last year.

“Regrettably, I must inform you that SWAPA and Southwest have been unable to meaningfully resolve numerous important, outstanding issues, and that further mediation will likely not result in any additional agreements between the parties,” Jody R. Reven, the negotiating committee’s chairman, wrote to the National Mediation Board on Thursday, according to a letter seen by CNBC.
The union said Southwest has refused to engage “in substantive discussions or offer ratifiable proposals” on issues like better pay, work rules, quality-of-life improvements and fatigue mitigation, according to a letter the union sent to the National Mediation Board.
Southwest’s vice president, labor relations, Adam Carlisle, said in a statement that the company disagrees with the need to be released from mediation.
“We’ve continued meeting regularly with SWAPA and, in fact, made an industry-leading compensation proposal and scheduling adjustments to address workplace quality-of-life issues for our Pilots,” he said. “We feel confident that mediation will continue driving us even closer to a final agreement that will benefit both our Pilots and Southwest Airlines.”
Pilot strikes in the U.S. are extremely rare, and the Southwest Airlines Pilots Association’s request does not mean that one is imminent because of procedures in U.S. labor law. The last major U.S. passenger airline strike in the country was at Spirit Airlines in 2010.
There are several so-called cooling off periods should the National Mediation Board declare an impasse between Southwest and its pilots’ union. Those last 30 days apiece, giving time for a potential agreement. More

Only one-third of the 1 million adults in the U.S. who tested positive for hepatitis C between 2013 and 2022 have been cured, according to a CDC report published Thursday.
Hepatitis C is often referred to as the silent killer because the initial infection has few to no symptoms.
Health insurance restrictions and the high cost of oral antiviral treatments, at up to $24,000 per patient, are preventing people from getting cured, health officials said.

Hepatitis C virus
BSIP | UIG | Getty Images

The overwhelming majority of people in the U.S. who have tested positive for hepatitis C have not been cured due to the high cost of oral antiviral treatments and obstacles imposed by insurance plans, federal health officials said on Thursday.
Hepatitis C is often referred to as the silent killer because the initial infection has few to no symptoms. Overtime, however, the virus can cause liver damage, liver cancer, liver failure and ultimately death.

The virus is spread through contact with an infected person’s blood, primarily through sharing needles and other equipment used to inject drugs.
Breakthrough oral antiviral treatments made by Gilead Sciences and Abbvie have been on the U.S. market for nearly a decade now. These pills, taken once a day for eight to 12 weeks, cure more than 95% of hepatitis C cases.
Despite the availability of these medications, only one-third of the 1 million adults in the U.S. who tested positive for hepatitis C between 2013 and 2022 have been cured, according to a report from the Centers for Disease Control and Prevention published Thursday. Health officials estimate up to another million people in the U.S. are infected but don’t know they have the virus.
Hepatitis C contributed to the deaths of nearly 15,000 people in 2020, according to the CDC.
“Thousands of people are dying every year in our country, and many more are suffering from an infection that has been curable for more than 10 years,” Dr. Jonathan Mermin, director of the CDC division that specializes in HIV and viral hepatitis, told reporters on a call Thursday.

The Biden administration has asked Congress to approve $11 billion in funding for a national program to eliminate hepatitis C by 2030. Dr. Francis Collins, who is leading the initiative at the White House, said the program will save thousands of lives and pay for itself by reducing health care costs.

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Health insurance and hepatitis care costs

Health officials said the primary obstacles to treatment are requirements imposed by health insurance plans and the high cost of treatment. The course of pills can cost up to $24,000 per patient.
Dr. Carolyn Wester, who heads the CDC’s viral hepatitis division, said some health insurers require burdensome preauthorization before patients can receive the pills and also limit which health-care providers can prescribe the medications.
Collins, who previously served as director of the National Institutes of Health, said community health centers that treat the uninsured cannot afford the pills for everyone. Only 1 in 4 uninsured adults diagnosed with hepatitis C have been cured, according to the CDC.
Even state Medicaid plans impose burdensome requirements such as evidence of liver disease, sobriety and the involvement of specialists, Collins told reporters on Thursday. The high cost of the drugs has made it difficult for Medicaid to treat everyone who is infected, according to the U.S. Health and Human Services Department.
Under Biden’s proposal, the federal government would pay pharmaceutical companies like Gilead and Abbvie a lump sum for the drugs. The companies would then make the medications available for free to the uninsured, state Medicaid programs, prison systems and people living on Native American reservations.
The proposal is based on a model launched by Louisiana in 2019, in which the state paid Gilead subsidiary Asegua Therapeutics a lump sum for enough drugs over five years to cure nearly all Medicaid patients and people who are incarcerated.
Collins said NIH and the Food and Drug Administration are also working on the approval of a rapid hepatitis C test that would provide a diagnosis in an hour or less. The test would be used to diagnose and treat patients in a single visit, he said. More