Other interesting partnerships for Dollar Tree could be Amazon, Kroger (NYSE: KR), and Walgreen’s (NASDAQ: WBA). Kohl’s is accepting Amazon returns, and Amazon is expanding its brick and mortar footprint with Amazon Go and other concepts. Meanwhile, Kroger and Walgreen’s are experimenting with joint-stores in Kentucky.Read more
What Dollar Tree is borrowing against is unclear because its cash and assets are limited. Dollar Tree’s assets were valued at just $15.827 billion on May 5, 2018. The company’s cash flow is limited and cash reserves are nonexistent.
Most likely, Dollar Tree is borrowing against its stock valuation. Dollar Tree shares were trading at $86.09 on July 16, 2018. That gave the company a Market Capitalization of $20.47 billion on the same day.
If my thesis is true, Dollar Tree would collapse if its stock lost any value. If Dollar Tree shares dropped below $60 or $50 the company might collapse because it would not be able to borrow money.