What if you bought Toys R Us in 2000?
US Consumer · Retail. The hindsight answer, year by year, against the only benchmark that matters.
Could you have picked it? Play1.9× · S&P 500 same money: $4,626
$1,000 in Toys R Us at the start of 2000 would be worth about $1,911 today. A plain S&P 500 index fund over the same years would have made more — the boring option won.
What happened: Toys R Us was bought out in 2005.
The story
Toys 'R' Us invented the category-killer toy superstore, but by 2000 it was squeezed between Walmart's low prices and the internet. In 2000 it struck a ten-year deal to be the exclusive toy seller on Amazon, then sued when Amazon let other sellers in; the partnership ended in court in the mid-2000s, and Toys 'R' Us built its own website too late. Investors had long doubted it could keep up.
In 2005 private equity firms KKR and Bain Capital, together with real estate investor Vornado, bought the company in a leveraged buyout for 26.75 dollars per share. That is why the price path freezes: shareholders were paid in cash and their story ended there, at a healthy premium. The company's story did not. Loaded with billions of dollars of buyout debt, Toys 'R' Us spent years paying interest instead of renovating stores. It filed for bankruptcy in 2017 and closed its US stores in 2018. The brand later returned in smaller form under new owners.
The lesson: Sometimes the best outcome for public shareholders is a takeover at a premium; the debt-laden aftermath then falls on others, not on those who sold.
$1,000 invested at the start of each year
| Bought in | Price then | Worth today | S&P 500 would be | Multiple |
|---|---|---|---|---|
| 2000 | $14.00 | $1,911 | $4,626 | 1.9× |
| 2003 | $10.00 | $2,675 | $7,727 | 2.7× |
| 2005 | $26.75 | $1,000 | $5,763 | 1.0× |
| 2007 | $26.75 | $1,000 | $4,789 | 1.0× |
| 2008 | $26.75 | $1,000 | $4,626 | 1.0× |
| 2010 | $26.75 | $1,000 | $6,071 | 1.0× |
| 2012 | $26.75 | $1,000 | $5,312 | 1.0× |
| 2015 | $26.75 | $1,000 | $3,301 | 1.0× |
| 2018 | $26.75 | $1,000 | $2,519 | 1.0× |
| 2020 | $26.75 | $1,000 | $2,092 | 1.0× |
green = beat the S&P 500 · red = lost money
Best entry point in our set: 2003, turning $1,000 into $2,675. The S&P 500 from that same year: $7,727.
Now try it without hindsight. The wheel decides the year and the asset class, you pick the position, ten seconds a pick, and we simulate to today. Toys R Us is one of 258 positions on the wheel — including the ones that went to zero.
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