Saturday night's $900 million Powerball drawing did not produce a new millionaire. As the lottery pool grows in advance of Wednesday's drawing, the new lottery winner will be a billionaire -- at least until Uncle Sam pays a visit.
At these levels, the pre-tax amount of the Powerball winnings is greater than the GDP of 14 nations, according to data provided by the World Bank. Forget buying a private island -- the eventual lottery winner could in theory own several island nations in the Caribbean.
With an expected pool of $1.3 billion, the presumptive lottery winner could have outbid noted activist investor and billionaire Carl Icahn for auto-parts retailer Pep Boys (PBY). Similarly, the winner could make a big bet on oil and gas -- as Icahn has -- and buy a number of depressed oil and gas companies at bargain prices and hope that energy prices eventually rebound.
However, those plays may be too much of a gamble for a new billionaire. Instead they may want to consider buying one -- or a combination -- of the following hard-luck companies. The names below have all faced trouble recently but with a new owner (and some luck), the Powerball winner could parlay those winnings into an even bigger jackpot if they can successfully turn the companies around.
Lumber Liquidators (LL): The eventual lottery winner is too late to outbid Carl Icahn for Pep Boys, but they could still get their hands involved in some of the companies coverered by the finance world's heaviest hitters. Lumber Liquidators currently has a market cap of $370 million. Its stock was driven down over the last year, after "60 Minutes" reported in May that there was formaldehyde in the Virginia-based company's laminate flooring. Whitney Tilson, the famed short-seller of Kase Capital, had been short on the company since 2013 for that very reason. However, in December, Tilson covered his short position after he received information that the company's management was not aware of the problem. He categorized the company's management as, "sloppy and naive, but not evil." It may be a company with too much headline risk to be a desirable purchase, but it could be had for a fraction of the lottery pool.
Glu Mobile (GLUU): Many people are unsure of how to spend their new windfall. With a market cap of just over $300 million, newly minted billionaires may want to consider buying this California-based developer of games for mobile phones and tablets. It is the company that launched "Kim Kardashian: Hollywood," a mobile game in which players assume the role of an ingenue who is catapulted to fame by Kim Kardashian and must learn to navigate their newfound wealth and time in the limelight. Shares of the company are down 53% since the game was launched in July 2014, but perhaps the lottery winner could learn from Kardashian's teachings. Or, they could guiltlessly play "Deer Hunter" or "Call of Duty" instead.
1-800-Flowers.com (FLWS): The eventual lottery winner is sure to find themselves overwhelmed with a flood of potential romantic suitors -- if the winner isn't already attached. With Valentine's Day coming next month, the eventual Powerball winner may want to buy the New York-based peddler of floral arrangements, which has a market cap of $440 million. Even so, investors -- or outright purchasers -- of 1-800-Flowers.com should be warned that Valentine's Day falling on a Sunday this year could have a "deleterious impact" on its top line, according to statements made by CEO and founder Jim McCann on the company's fiscal 2015 earnings call in August.
The Container Store (TCS): With wealth comes the tendency to acquire a lot of stuff -- and a need to store and organize all that stuff. With shares of The Container Store trading down 41% on Friday after the company reported losses of $0.04 a share, the market cap of the Texas-based company stands at just over $200 million. Despite reporting a dissappointing quarter, CEO Kip Tendell said on Friday that the company has seen "strong growth" in the company's Elfa and TCS Closets businesses. Surely a newly minted millionaire could use a little help organizing their many closets i ntheir new mansion.
Barnes & Noble (BKS): Some millionaires like to add their name to libraries, but with a market cap of $660 million, the eventual lottery winner could buy this New York-based book retailer instead. Indeed, the era of e-readers has meant that tough times for Barnes & Noble as sales of its own e-reader, the Nook, fell 25.8% from the 2014 holiday season, the company reported on Thursday. That said, the newest lottery winner could enjoy the benefits of essentially having their own library in almost every U.S. city they visit. And since most lottery winners never return their day jobs, they'll likely have a lot of time to read up on the best ways to invest their winnings.
