Two Morally Bankrupt Barstool Employees Double Their Money Investing in a Bankrupt Company

At one point last week Large and I were up more than 100% on a bankrupt makeup company investment we made in THE FAMILY OFFICE portfolio. And we should probably just hang it up now, because we will never look this intelligent ever again.

(ICYMI, Large and I are investing $5,001 of our own money for your entertainment. We chronicle our bad ideas and worse investments via our TV on the Internet show called THE FAMILY OFFICE. You can watch on YouTube or listen on Spotify or Apple Podcasts as we try to buy our children’s love by creating generational wealth.)

Just one problem: I have the spine of a jellyfish and put just 10% of the portfolio to work on what will be the best trade of my life/the only thing that ever makes my parents proud of me.

I closed out the position +75%. THE FAMILY OFFICE portfolio is up a little less than 4% on the year. Turns out buying Exxon Mobil near its all-time high was a poor choice. Still, our gainz are of the "market-beating" variety (the S&P 500 is down big on the year). And it's not a competition, but if it was, we'd be beating most of our peers. Looking at you, billion dollar hedge funds.

The trade that I’ll talk about to anyone that listens is REVLON, the makeup company that isn't actually that good at selling makeup, but is really good at taking on debt. The lipstick maker is so bad at selling makeup that it filed for bankruptcy on June 15th. And it's got Ray J to blame. Had Ray J never made the Kardashians famous, Kris never would have been able to puppet master into existence Kylie's billion dollar makeup empire that drank Revlon's milkshake. You hate to see it.

Interestingly, REV stock mooned nearly 300% in the days after going all "I DECLARE BANKRUPTCY."

Partially because it secured a bankruptcy loan, partly because rumors began swirling that an Indian conglomerate was considering a buyout… but mostly because the stock market is a cesspool of bullshit and broken dreams where nothing makes sense. Friendly reminder: shareholders usually get wiped out in bankruptcy, so there should be no reason to buy this stock.

THAT SAID… Large and I bought on Tuesday, June 21st at $4.01. Over the next two days shares jumped more than 100%. And I probably haven't spent that much time on my phone since the day I found out that PornHub was mobile friendly (sidenote: they really should have made the iPhone 4 waterproof).

I didn’t risk it all on REV because there were any redeeming qualities about the stock or company. My thesis was simple: people like me hadn't started buying it after it had already climbed ~200%. When I started looking at Wall Street Bets and StockTwits to see why the mouth breathers were piling into the stock, it became pretty obvious this wasn't a retail play.  Literally no one was talking about it. That told me two things 1) The smartest guys in the room were buying it for some reason (honestly I had no clue why) 2) If nothing else, I could catch some of the upside when the other dummies like myself figured out WTF was going on. Oh, also I got incredibly lucky.

Even though we sold, don't for second think that THE FAMILY OFFICE is above hitting an ex with a “u up?” text at 3 AM. REVLON is back on THE FAMILY OFFICE’s watch list this week. Probably towards the bottom half (Large has a boner for Elon and Twitter), but it still made the cut…

Remember GameStop circa 2021? People like Reddit user cumguzzler69420 benefitted from a short squeeze. If you don’t know what a short squeeze is, I’ll save you the Google search: here’s the Investopedia link. Some investors believe a short squeeze could be shaping up for Revlon. Most of the ingredients are there: a soaring stock price and thicc short interest (38% as of Friday). For what it’s worth, despite what most Internet bottom feeders think, there needs to be a perfect shitstorm of events for a short squeeze to print money.

On a longer time horizon, there is some precedent for a company filing for bankruptcy, seeing its stock soar, and investors not getting totally fucked. Hertz did this back in 2020. Investors bought shares like they were OnlyFans jarred farts, and on the other side of the legal proceedings they actually ended up with stock in the new Hertz.

Snap necks and cash checks,

Tyler

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