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Basenese’s “Buy Low/Disappear High” pitch for a penny stock Walmart Takeover

What are the companies teased as the "Takeover Kings of January?"

By Travis Johnson, Stock Gumshoe, January 11, 2022

Here’s a little bit from Lou Basenese’s spiel for his Takeover Trader:

“In the coming days, I believe Walmart will announce plans to acquire a little healthcare company that trades for just over a dollar.

“As far as an offer price goes, THINK BIG…

“I expect Walmart to make a buyout offer of $15.25 per share — representing a 1,120% “buyout bump” over this little company’s current stock price of $1.25.

“If I’m correct, company insiders could soon be sitting on a fortune.

“See, insiders presently own 2.4 million shares of common stock in their little healthcare company, valued at $3.1 million.”

Enticing, right? He even includes a little countdown clock in the ad, causing the heartrate to ramp up a little bit as we think about making sure we get in RIGHT NOW OH MY GOD WE’RE GONNA BE RICH WHERE’S MY CREDIT CARD?!?!?

Ahem, sorry. Back to reality.

The basic pitch from Basenese is about the idea of “disappearing stocks” — which is just a little metaphor for “takeovers.” Investors often delight in owning the shares of companies that get a takeover bid, because most of the time a takeover offer will come in at a substantial premium to whatever the current share price happens to be — 1,000% is obviously wildly dramatic, most takeovers are nowhere near that level, but it’s pretty typical for an acquirer to offer a premium in the 20-40% neighborhood to try to buy out existing shareholders and take control, sometimes considerably more than that if it’s a small stock or a great strategic fit or a bidding war to acquire a company.

And yes, sometimes that does lead to stocks that “disappear,” in the case of a cash buyout — small passive shareholders like you and I do generally get a vote in a takeover deal, but we don’t really own enough shares to have any meaningful say, so we would either sell our shares once the takeover seems likely to happen or, if we hold through to the end, typically see our shares “disappear” and be replaced with the cash from the acquiring company.

But just as often, takeovers are done with stock — particularly these days, with stock prices pretty elevated, since that gives the acquiring company a nice richly-valued currency to work with. In those cases, your stock doesn’t disappear and get replaced with cash, it gets replaced with some fair number of shares of the acquiring company. And usually, unless it’s a great deal, the shares of the acquiring company will drift down a bit as the shares of the company that is being acquired drift up.

You probably already know this, intuitively, you know there’s always a level of merger and acquisition activity taking place in the market, that it’s generally good for the companies getting acquired, at least in the short term… and you also know that unless you’re an insider at one of those acquired companies, it’s not likely to make you rich. Nobody can pick out takeover candidates with any consistency success, though we all get lucky from time to time and I’m sure some people are better at it than others, so the conventional wisdom — which I happen to embrace — is, “don’t buy a takeover target unless it’s a company you want to own even if it doesn’t get a takeover bid.” You don’t want you only reason for owning a stock to be, “I hope someone will overpay to buy these shares.”

But anyway, here’s a little more from Basenese’s spiel, to give you an idea of what he’s pitching:

“Stocks don’t just randomly disappear.

“Rather, every stock that has disappeared throughout history — all 3,000 of them (and counting) — tend to follow the very same, highly-predictable, three-step pattern…

“STEP #1: Stocks attract a buyout offer.

“STEP #2: Upon receiving a buyout offer, the stock price blasts higher.

“STEP #3: The stock disappears.

“That’s not hyperbole, either…

“Shareholders of ‘disappearing stocks’ aren’t required to sell them — shares automatically vanish from their trading accounts. Yet since such stocks always rocket higher before they vanish, without exception…

“Those same shareholders are required to decide how to spend (or save) their windfall gains… Perhaps a vintage Porsche? A down payment on a vacation home? A charitable gift to the church or a children’s hospital?”

That’s one of the most obvious red flags of investment pitches, of course — anytime they talk about the sports car or boat that you can buy when you book your riches, best to walk away. All that does is trigger the “greed” impulse, which depresses the “think it over first” impulse — once you begin imagining how successful you’ll be, the cost of the newsletter starts to seem ever more reasonable in comparison (in this case, $995/year for Lou Basenese’s Takeover Trader). I will give Basenese credit, though, for not including a photo of that vintage Porsche or vacation home. Admirable restraint.

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So as you’ve no doubt already figured out in your mind, the key to getting windfall gains from takeovers is buying the shares of companies who get a takeover bid before there’s any indication or rumor or hint of a takeover. Once there’s any public speculation or leak about a company thinking about offering itself up for sale, or an acquirer on the hunt, speculators go nuts trying to figure out which company it might be and send the share prices of potential acquisitions climbing… and once there’s something more official, like a real media report of a deal in the works or a formal offer, the “windfall” part is done. The stock shoots up, and knowing about that potential deal does you no good, because everyone knows about the potential deal and they’re all frantically trying to “price it in.” Moments after details of a takeover are announced, the company being acquired will be trading within a few percent of that acquisition price — if it’s much lower than that, it’s essentially a vote from the market that they don’t think the deal will go through.

So that gets us full circle… Basenese says his “Golden Rule of Takeovers” is that “since roughly 95% of gains occur upon receiving a buyout offer, investors must buy stocks BEORE a buyout offer hits.”

Which is true. But that’s like saying, “the best way to make money is to buy stocks that are about to report good news.” If you’re trying to make the perfect match with a stock that’s about to get a rich takeover offer, you can probably land on some some if you’re working in acquisitive industries, particularly tech and biotech… just remember that your odds are not very good, and you’re going to end up kissing a lot of frogs along the way. Make sure that you have a reason to own a stock other than your speculation that someone will want to take it over.

Does Basenese really know where the next takeover offer is about to hit? Well, we’ll let you be the judge of that. He drops quite a few hints about the company that he pitches as “Takeover Target #1,” so that’s pretty easy work for the Thinkolator…

“TAKEOVER TARGET #1: Imagine owning a takeover target for $1.25.

“I’m tracking a company that operates a growing chain of ‘regenerative care’ centers across the United States — i.e. small health clinics that treat sports injuries, joint pain, back pain, orthopedic injuries, and other movement-restrictive conditions like arthritis.

“Although the company’s footprint is growing — from six locations a few years ago to 20 today — my investment thesis isn’t based on growth metrics alone.

“See, this little company recently opened its first clinic inside of a Tennessee Walmart… and management says to expect ‘additional’ Walmart clinics to open.

“With patient visits up 30%, I believe Walmart is prepared to outright acquire this company.

“As far as an offer price goes, THINK BIG…

“I expect Walmart to make a buyout offer of $15.25 per share — representing a 1,120% ‘buyout bump’ over this little company’s current stock price.

“On the merits of its massive takeover potential, this could easily be the biggest takeover of the decade.”

That’s IMAC Holdings (IMAC), a penny stock microcap which is trying to build a branded chain of chiropractic/sports medicine facilities, including, recently, some outlets within Walmart locations on a test basis. They opened their first facility 20 years ago, but were basically a one-location sports medicine company until 2015, when they started to try to expand, in part by making deals with professional athletes to brand facilities. So now they’re building out those branded centers that offer sports medicine, sometimes orthopedics and chiropractic care, and similar services. So they have a few Ozzie Smith IMAC Regeneration Centers in Missouri, a few Mike Ditka Regeneration Centers in the Chicago suburbs, you get the idea — they say they currently have 15 of these larger facilities. Those centers generate most of their revenue today, but the focus recently has been on the rollout of The Back Space, which is a brand they’re testing at Walmart locations. Here’s how they describe it in recent press releases:

“The Back Space, located within Walmart stores, are retail healthcare centers specializing in chiropractic adjustments, nerve and muscle stimulation, and percussion tool therapies for soft tissue recovery, muscle relaxation, and spinal wellness. Services are offered on a walk-in and appointment basis, priced at $25 per treatment, with memberships available for $65 per month that are valid at any The Back Space location.”

I have no idea what the demand is for “spinal health and wellness services,” and have never been to a chiropractor, so I don’t have any intuitive feel for how that pricing or appeal might compare to other healthcare services for those with back pain or similar ailments… it’s not even entirely clear whether these are going to be staffed by physical therapists, masseuses, chiropractors, nurses or doctors, or what, so I assume it’s somewhat fluid right now. Though I will say that on the rare occasions when I visit a Walmart, the two things I need are usually about half a mile away from each other, in opposite corners of the store… so perhaps those long walks on concrete floors will create more business for The Back Space.

This is a business that should have been expected to dip a bit because of COVID — lots of similar “elective” medical services saw patients wait it out at home during “hot” periods of the pandemic so far, and a lot of sports and physical activities were curtailed, which probably cut down on injuries. I imagine that chiropractic and orthopedic care probably were not prioritized by patients over the past couple years unless they were in pretty serious pain.

And that’s what it looks like in their financials — revenue was drifting lower already by March of 2020, but the second quarter of 2020 was their worst quarter since 2018. The revenue has recovered a bit, but there’s not really any meaningful sign of growth in the financials yet — to foresee growth, you’ll have to make some assumptions about their continued expansion into new areas (they just bought a facility in Louisiana, so they’re likely to expand around that, for example), or some optimism about this small pilot Walmart test, and about how fast those locations can begin to generate some revenue.

So it’s an interesting idea, they seem to be leaning pretty hard on this idea of memberships at The Back Space, trying to get folks to sign up for a monthly membership at $65 that gives them access to treatments at every one of their locations. This is a brand new initiative, the test with Walmart is for ten locations and the first one only opened in June, so it will be a while before there’s any real indication of the financial potential — so unless there’s some shocking announcement about a Walmart takeover, which strikes me as very unlikely, though I’m sure I haven’t studied it as closely as Lou Basenese, the results for IMAC in the near future are likely to be driven by the results of the gradually expanding portfolio of larger sports medicine clinics, where most of their revenue comes from.

Is that worth owning? Well, that’s a judgement call — this is a microcap stock, with a market cap of only about $30 million, so certainly anything could happen that might move the share price, but as I look at the business itself I don’t immediately see a lot of obvious financial appeal. Yes, if they can create a new patient care model with this Walmart test, then perhaps they can get some meaningful growth going, though it would take a fair amount of time… but my general sense is that these intensive personal care businesses aren’t easily scaled. Almost all of the cash flow in a doctor’s office or a chiropractor’s office, or even a physical therapy or massage practice, goes straight through to pay the professional employees, and, as you’ve seen from the drive for efficiency in healthcare that leaves you with a six-minute block of time with your physician, a human being is only “scalable” to a certain point.

From a glance at the company’s books, which admittedly give a limited look since they’ve only been around for a few years, and half of that time has been COVID-impacted, it looks like their direct patient expenses and salaries for the past three quarters have come in at about 105% of their revenues, before you take into account their marketing costs or administrative overhead. 2020 was actually a bright spot for them on the financial front, but mostly just because they laid people off for COVID so that ratio was only about 98% instead of 105% — but they still lost a ton of money overall, their overhead costs didn’t fall as much.

I think there are probably good reasons why we don’t often see nationwide chains of masseurs or chiropractors or doctors or even hairstylists — it’s hard for a business like that to generate enough gross margin to please outside investors. Specialties that depend on the skill of the practitioner and a personal connection to the patient/consumer have a hard time squeezing their staff enough to justify big marketing and expansion costs, and patients and consumers tend to migrate to individual providers, not always brands. There are lots of franchise operations in chiropractics and massage, and there have been a few dental chains, but it’s rare to see these kinds of companies publicly traded… and my impression is that they often end up getting terrible reputations (there was a long investigation of some of the private equity-funded dental chains back in 2020 that was pretty chilling).

Maybe the Walmart deal will be transformational, if these first locations work out well, but even if I’m wrong to be skeptical, and that turns out to be a great business, it will take time… presumably they’ll need to let these pilot locations operate for a while to see if they work and can be profitable, and Walmart isn’t known for leaving a lot of profit margin to their partners. And while Walmart does make acquisitions pretty regularly, this would be an unusual one for them — most of their acquisitions are of existing retail chains where they can build or rebrand them to instantly get some presence in a new market, or of technology or specialty retail names that fit into their strategy of competing in e-commerce. Most Walmarts have leased franchises or other little businesses inside their footprint, whether it’s a Subway or a nail salon or a bank branch, and lots of Walmart locations also have a Care Clinic of some kind attached to their pharmacy, not unlike the CVS Minute Clinic, so Walmart doesn’t need to acquire a “spinal health” provider to get into healthcare… but from Walmart’s perspective, I guess there’s not much downside to leasing the space to IMAC and letting them test this retail health concept. That’s a far cry from saying that Walmart is thirsting to control this business and will offer a wild premium to take over the company.

Just as a bit of context, IMAC’s press releases in December indicated that it took them about six months at their first pilot Walmart location to hit 100 members. That’s probably partly because they took time to refine the marketing, and they might sign folks up more quickly in the future, but the good news was that they said they had refined their messaging and marketing to ramp up to “engage 40 new members in six weeks”. We don’t know much else about these locations, or what they cost or how many members they can manage with baseline staffing, but 100 members is simple math, that’s $6,500 in monthly membership revenue (assuming that the “walk ins” who get a $25 adjustment and don’t sign up for a membership are a pretty small number). Without a lot of walk-in revenue, that would be $78,000 a year, assuming the subscribers stick with it… and we have no idea what their cost structure is, but maybe that’s enough to cover the rent of their office within the Walmart and one aide, at a guess, but certainly nowhere near enough to cover having an experienced physical therapist or chiropractor on site during all of Walmart’s opening hours. I don’t know how many customers they would need, or what the details of their business plan might be, but when daydreaming about potential like this I do like to take it down to the unit level — often, that’s where you can make yourself be a little more realistic. And from what I can tell, on the unit level, these IMAC Regeneration Centers so far are not able to break even… and I expect it would be even tougher for The Back Space, which will be charging much lower prices and not getting any insurance payouts.

Those Back Space locations at Walmart are not the core of the business, and won’t be anytime in the near future, but one never knows. They are still building the core business of their standalone sports medicine and orthopedics facilities, including by acquiring existing chiropractic and sports medicine practices, and press releases over the past year indicate that they’re buying facilities for something between 1X and 2X cash flow (they cited 1X for a Florida acquisition, and 2X for one in suburban Chicago that will join their established group of “Mike Ditka IMAC Regeneration Centers”)… though what they mean by “cash flow,” I don’t know. Gross profit? Operating cash flow? Revenue? It’s not particularly clear. They have been funding their acquisitions by selling shares at lower prices, with the most recent large fundraising being $17 million or so in early 2021, at $1.60 per share — as of September they still had $11 million of that cash left, though at their recent cash burn rate it’s probably somewhere in the $8 million neighborhood now.

Most of the large orthopedic practices in the US seem to be local or regional, as when physician groups and investors gradually buy up local practices to build a strong brand with a local hospital group or in a metropolitan area, but for whatever reason — and I imagine there is a reason — we don’t typically see national chains of medical specialists. Is that about to change, starting at Walmart? Well, I won’t hold my breath… but it’s a little company, the fact that it’s not likely to get a 1,000% buyout offer doesn’t mean it might not be otherwise attractive if you feel like getting on board. I’ll pass, but you can make your own call.

And incidentally, IMAC Holdings was a tough sell for investors back in 2019 when they went public, so they had to also offer up a pretty sweet warrant deal to get people to buy in (they offered units that consisted of one share and two five-year warrants, which is pretty extreme — and investors were right to hold out for a lot of sweetener, because the stock has fallen 60% since that 2019 IPO). That means there are still warrants publicly traded on this stock, with an expiration date in February of 2024 — they don’t trade much, the average volume is awfully close to zero (the warrant ticker is IMACW), so don’t run off and get excited, but there should be 1.7 million warrants out there if you want to get some leverage. They’re far out of the money, with a strike price of $5, so even at 25 cents or so the shares would have to rise by 350% or so in two years to make the options a better bet than the shares, but if it works out that Basenese is somehow right about that 1,000% rise in the shares you’d get more bang for your buck with the warrants than with the stock (I’d put the probability of that at just a hair above zero, but nothing is impossible… and I am wrong sometimes).

What else does Basenese say in inspiring us to search for these big payouts? Here’s a little taste:

“When searching for the next big takeover, you can dramatically increase the odds of success through your own diligence and discipline…

“Make sure your takeover target is a small-cap/mid-cap company… make sure it owns a breakthrough product (or service)… make sure its labor force is growing (never shrinking)… make sure its patent portfolio is valued above $50 million…

“Make sure its product (or service) poses a legitimate threat to an established company… make sure its balance sheet is reasonably clean… make sure it operates in an industry known for high-priced deals, like robotics, artificial intelligence, biotechnology, and healthcare…

“Make sure an offer could happen any minute (not months or years into the future) …

“But most important of all…

“Be absolutely certain that your takeover target can…

“Fetch a buyout offer that is 500% above the current stock price…”

IMAC does also have some slightly hidden potential, in that they’re also claiming to have some unique techniques and treatment strategies for non-surgical, non-opioid treatment of orthopedic problems and sports injuries… and they also have a research division that is currently in very early phase clinical trials for a stem cell treatment for Bradykinesia. That’s a manifestation of Parkinson’s Disease, and more power to them, but I would keep expectations low — anyone can put together a very small Phase 1 clinical trial, this one is for 15 patients in total, but going beyond that begins to get extremely expensive, so if there’s any M&A activity around IMAC it’s probably more likely to be them selling or partnering that treatment to some larger company if it turns out to be very promising.

Well, I really blathered on for a bit there, sorry — it could have been worse, I cut out half of what I was writing as I researched this one, but companies I don’t know at all take a little more research… and often it’s the lowest-probability little ideas that I have no interest in buying that I end up spending the most time on. Ain’t life grand?

But wait! There’s more! Basenese teases three “Takeover Kings” for January in his ad, and he drops a few hints about the other two. Can we name them?

Clues, please!

“TAKEOVER TARGET #2: Most biotechnology companies live and die on their ability to navigate the challenging FDA drug-approval process.

“How challenging, you say? Well, given the cost of research, clinical trials, laboratory time, payroll, intellectual property, and defending lawsuits — the average cost to bring a new drug to market is $2.6 billion.

“But I discovered a biotech that has accomplished the impossible — it’s invincible to the harsh economics of the drug business.

“See, by simply helping other companies accelerate their drugs through the FDA approval process, this company tallied over $4 billion in sales last year… while also dodging virtually every risk inherent in running a biotechnology firm.

“The company’s order backlog, which now stands above $11 billion, underscores the searing-hot demand for its services.

“Such resounding success, however, never goes unnoticed…

“I believe Big Pharma could pounce with a major buyout offer any minute.”

Thinkolator sez that’s almost certainly Syneos Health (SYNH), which, as you might expect from those billion-dollar revenue and backlog numbers, is a much larger company — they have a market cap just under $10 billion at the moment.

Here’s how Syneos describes itself:

“Syneos Health® (Nasdaq:SYNH) is the only fully integrated biopharmaceutical solutions organization purpose-built to accelerate customer success. We lead with a product development mindset, strategically blending clinical development, medical affairs and commercial capabilities to address modern market realities. Together we share insights, use the latest technologies and apply advanced business practices to speed our customers’ delivery of important therapies to patients.”

Financially, this is a company that has hit a pretty sweet spot — they’re profitable, and they’re growing their earnings faster than their revenues, though their growth right now is also exaggerated by the fact that it’s partly a bounce-back from the decline in mid-2020. Analysts expect them to grow revenue by a little over 10% a year, and earnings by closer to 15% a year, which is a slowdown from the dramatic jump in 2021 but still quite solid. And they’re trading at about 20X 2021 earnings (assuming the fourth quarter estimates are close to accurate), and about 18X forward earnings. On that basis, this slots in pretty nicely as a “growth at a reasonable price” investment in healthcare, and it’s one that’s not likely to be as volatile as individual drug developers.

Will Syneos get acquired someday? Maybe, though it would likely be a strategic merger with another contract research organization (the firms that are contracted out to run clinical trials and research for pharmaceutical companies), not a big pharma company. They are themselves pretty acquisitive, they buy up little technology providers and contractors with some regularity… and they are reportedly in talks for a pretty big deal to merge with or acquire Covance, another contract research organization that is currently a subsidiary of LabCorp (LH bought Covance back in 2014 for $5.6 billion, but the Bloomberg story speculates that it would be worth something like $18 billion, meaning that Syneos would be the smaller part of the merger, but Syneos would be the surviving company and would keep its upper management).

I don’t know if the reported talks will lead to anything, the news dropped in November and I haven’t seen any updates since then. Syneos is a reasonable investment idea, it’s not dirt cheap but it’s reasonably valued… and on a forward PE basis, it’s currently the cheapest of the large contract research organizations I’m aware of, and has recently had similar levels of revenue growth (the ones I looked at are ICON plc (ICLR), Medpace (MEDP) and IQVIA (IQV)). As stocks, Medpace has been the standout in recent years but IQV, ICLR and SYNH have generally all traded together most of the time.

And one more for you…

“TAKEOVER TARGET #3: It’s not often that a company is ripe for profits and truly altruistic in practice.

“But I’ve found such a company headquartered in Cambridge, Massachusetts…

“The highest purpose of this biotechnology company’s life-changing science is 1) to “train” the human body to cure its own cancer, thereby smashing oncology’s old paradigm, and then 2) to further evolve the science so that it can eradicate every disease on Earth!

“Of course, breakthroughs pose a threat to Big Pharma.

“Given such a threat exists here, don’t expect Big Pharma to place its fate (and profits) in the hands of an upstart biotech from Cambridge, Massachusetts.

“A buyout scenario is far more likely — one very similar to the Synthorx/Sanofi deal.”

That one’s a bit tougher… finding a company based in Cambridge, MA that’s working on immunotherapy and eradicating cancer, with a public face of altruism as they seek to eradicate disease, is about as difficult as finding an aspiring actor in Los Angeles. Given the absence of clues and my lack of expertise in biotech, I’ll stop short of even throwing out wild guesses…. if you’ve got a Cambridge immunotherapy biotech you think is worth buying, feel free to shout it out with a comment below.

And that’s all we’ve got today, dear friends — a couple takeover candidates teased by Lou Basenese, a little grumpy skepticism from yours truly, and a handoff back to you… it’s your money, so are these the kinds of stocks you want to own? Have other takeover targets in mind, or other companies in these areas that are more appealing to you? Let us know with a comment below. Thanks for reading!

P.S. We always want to hear from people who actually subscribe to the newsletters we cover — so if you’ve tried out Lou Basenese’s Takeover Trader, please click here to share your experience with your fellow investors. Thanks!

Disclosure: I don’t have any direct exposure to any of the investments discussed above, and will not trade in any covered stock for at least three days after publication, per Stock Gumshoe’s trading rules.

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Philip
Guest
Philip
January 11, 2022 11:55 am

Sounds to me similar to a Pump and Dump play ?

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spandya22
spandya22
January 11, 2022 5:54 pm

Looks like the pump and dump happened last week.

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willykid
January 12, 2022 10:11 am
Reply to  spandya22

How do you pump something without saying what it is? The only way I see that working is if hoards of people are sleuthing these ad’s the moment they come out.

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4lllls
Irregular
January 11, 2022 11:59 am

Walmart is the pits lately. Seems like they are going down hill

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Salma
Member
Salma
January 11, 2022 12:14 pm

Great writing on your part. I always feel better after reading your breakdown of these great deals where you could get rich very quickly. I beleive they get rich very quickly on the subscriptions they fish in. Love your research on the companies mentioned in these articles. Thanks for the work.

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vintee786
January 14, 2022 12:10 pm

Hi Travis
what is going on with DOCU , ROKU ?
Do you think they will come back on come month or its 3 to 5 year story
Thank you

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vintee786
January 14, 2022 3:41 pm

Thank you !
Do you know any Tesla supplier stock .like APTV kind of stock .I do know you don’t own Tesla.

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Wombat
Guest
Wombat
January 15, 2022 10:07 am

I’m confused by your take on Roku, Have you used their product? It’s horrible and being replaced as newer and better smart TV’s come to market. Their content is also poor. I usually agree with you, like DOCU and many others, but no this time. Keep on, keeping on tho…

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charles hurley
Member
charles hurley
January 11, 2022 12:29 pm

$25 for Chiropractor or massage therapist per visit is very low (significantly less than half the typical price here in the Wash DC metro area). Doubt that Back Space can successful at that target one visit visit any place in the US.

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Back Space
dreamdoc
January 11, 2022 1:53 pm
Reply to  charles hurley

I had a similar thought – could these clinics be a way to mitigate workers compensation claims for back injuries??? If WC was looking to get into health care this might be a good place to start.

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David Cregar
Member
David Cregar
January 11, 2022 1:48 pm

Would WMT open itself up to malpractice in exchange or sell space?. There are many back stores shops inside WMT already. Hair, Vision, Tax prep, Mcd ,banks , payment processing etc. I know nothing about it and it seems like a bad idea. Have and will continue to enjoy the write ups.

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elizadoo
elizadoo
January 11, 2022 4:06 pm

Cannot for the life of me see how The Back Space is expecting to turn a profit, unless it turns into a loss leader of some type and funnels business/traffic into insurance claims, massage chairs, OTC medications and supplements, and other yet undisclosed cash generators. WMT has nothing to lose by renting out the retail space.

And as an aside, yes, it seems like WMT stock has reached a plateau. I shop there for the bare essentials, but employee staffing has gone downhill–though, truth be told, that seems par for the course in the USA. Which reminds me, AI and Robotics are going to have to come to the rescue of our ever-dwindling employee pool, lest we fall behind in global productivity.

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timcoahran
Irregular
January 11, 2022 9:56 pm

Anybody who thinks Walmart will pay handsomely for ANYTHING – probably hasn’t tried being one of their coffee suppliers!

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cabaoke
Member
cabaoke
January 13, 2022 1:30 am
Reply to  timcoahran

Exactly! Why would Walmart pay a premium for something their already making money from?

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