Replies to post #216 on Boxed Inc (fka BOXDQ)

[TheByrum]

I'm not 100% that a "buyout" will occur. And, FYI, the "Blackrock" involved is not the Blackrock the of ETF world that everybody thinks about. This Boxed deal is small change to the ETF machine. The Blackrock (BR) involved is one of BR's private equity firms that lends to middle market firms. The thing that I think about is that the lender in this case gets Boxed's assets if Boxed defaults... which would indicate bankruptcy.

During the bankruptcy negotiations, the lender and parent company (Seven Oaks/ Boxed, Inc) -- including investors like Aeon-- COULD renegotiate ownership, just like any other refinancing, during which time Boxed would be considered either debtor-in-possession or a "Going Concern." Maybe you already know all of this, and maybe I am totally wrong on this. The business would continue, but the shares would likely be delisted. The lender would divvy up what the lender wants. The remaining assets would go into a "special finance vehicle," of which MAYBE present shareholders would get a piece of AFTER fees and judgements are paid and who knows what else. The new share structure would likely give the present lender of the Second Lien Agreement a senior tranche of new debt, and the junior tranche would be sold to Aeon or a corporate venture fund like Amex Ventures or whomever.

The point I'm trying to make is that present common shareholders may get wiped out because the debtor is in possession of Boxed's assets, INCLUDING its stock. But, as I've been saying, I have no clue what will happen.

I do, however, believe that the business will continue to run in some way... Either the Saas business gets sold or a foreign retailer gets Boxed's US CPG biz, or the present lender gets to keep everything and make money and grow Boxed's biz... as these middle market PE firms tend to do from time to time. :) Some of them actually hang on to the business for a while, leaving the biz indebted and reaping the cash for distributions to the PE's present shareholder base... which is likely one of the reasons BR has this type of PE business, given that the ETF Blackrock can sell dividend capture funds which hold a variety of these middle market PE firms who pay a giant dividend each quarter.

I think of Carl Icahn's analogy of Larry Fink leading a caravan of wagons piloted by Janet Yellen and Fed Res bosses, and Fink is leading them to a cliff at full speed.


10March23