Bed Bath Beyond stock falls 48% after offering

Bed Bath Beyond's BBBY stock fell 48% on Tuesday, a day after the embattled retailer announced an equity offering to raise as much as 1.025 billion.

One analyst said the company's move was a last ditch effort to secure its future. Given the stock's 90% plus price runup February 6, we think the capital allocation choices under duress are still poor, said Jaime Katz of Morningstar, a note to investors. The analyst has a Sell rating on the stock.

BBBY rose 92% on Monday, ahead of the preferred stock and warrants offering announcement, as a recent rally in the company gained momentum.

According to the data from S 3 Partners, short interest in the retailer is about 53% of the float.

Bed Bath Beyond is trying to conserve cash as it teeters on the edge of bankruptcy after accumulating more than $1 billion in debt and losses by the end of 2022.

In a recent regulatory filing, the company warned that it was hit with a default notice from JPMorgan and doesn't have enough funds to repay its loans.

Meme stocks have rallied over the past month as some of the trades reminiscent of the 2021 meme craze regained popularity so far this year.

Both GameStop GME and AMC AMC are up since the beginning of 2023. AMC shares fell 9% on Tuesday after gaining 11% in the previous session.

The stock of Bed Bath Beyond has been mostly on an upward trend after hitting a 52 week low of $1.27 on January 6th. The shares closed at $3.01 a piece on Tuesday.

Over the past month, investors have taken a risk-on approach, with AI-related equites joining tech names as the biggest winners in addition to meme names from yesteryear.

Artificial intelligence maker C 3 ai AI was up 6% on Monday, while smaller-cap, lesser-known names like BigBear.ai BBAI soared 18% and the voice AI company SoundHound SOUN increased 42%. All three stocks gave back gains on Tuesday.