BBBY Stock Has Plummeted as the Company Has Been Said To Be Considering Filing for Bankruptcy

BBBY Stock


U.S. home goods retailer BBBY stock plunged on Thursday after the company said it was considering filing for bankruptcy to address its plummeting sales, diminishing cash, and heavy debt burden.

In a regulatory statement, the store disclosed that it had “serious uncertainty about its capacity to continue as a going concern” and was looking into “strategic options,” such as restructuring or refinancing debt or filing for bankruptcy.

Sales at Bed Bath & Beyond (NASDAQ:BBBY) dropped 33% from the previous quarter, leading the company to predict a loss of $385.5 million for the period. The revelation sent the company’s stock tumbling 23% in premarket trade on Thursday, sending the price to $1.84. With approximately 9.4 million shares moved as of 9:37 AM ET, the company was among the most active on the Nasdaq.

After prioritizing its private-label products, BBBY stock saw its profits and stock value plummet. The store’s leadership has recently changed direction and is actively working to stock more well-known brands.

“This past year’s implementation of a turnaround strategy has failed. In a nutshell, the company is heading in the wrong way at breakneck speed, and bankruptcy is the most probable outcome, “Author and GlobalData analyst Neil Saunders said.

The firm’s stock price shot up by more than 400% in a single year, making it a popular topic of internet jokes. GameStop Corp (NYSE:GME) chairman and activist investor Ryan Cohen bought stock in Bed Bath & Beyond and then dumped it, tumbling it.

“Our financial performance was adversely affected by inventory restrictions as we collaborated with our suppliers to handle both micro- and macro-economic problems,” said Chief Executive Officer Sue Gove.

On Tuesday, the corporation will release its financial results for the third quarter, which ended on November 26.

In its last financial statement in the autumn, Bed Bath & Beyond reported $850 million in liquidity but $325 million in spending in the second quarter.

Over the next two years, it is expected to burn through $1.5 billion in cash, according to analysts.

According to SEC documents, the firm had been trying to entice bondholders to exchange their holdings for new debt to give it more breathing space to turn around its business. Still, it abandoned the transaction on Thursday after receiving little investor interest.

According to Reuters, Bed Bath & Beyond contemplated selling its valued buybuy Baby shops, which offer products for newborns and toddlers, earlier but decided to wait in the hopes of getting a greater price.

The store’s highest amount could borrow $375 million, and because of the worth of the chain, it was able to secure that amount.

Featured Image: Megapixl @  Georgesheldon

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About the author: I'm a financial journalist with more than 3 years of experience. I have worked for different financial companies and covered stocks listed on ASX, NYSE, NASDAQ, etc. I have a degree in marketing from Bahria University Islamabad Campus (BUIC), Pakistan.