Bed Bath Beyond stock falls 45% after offering

Bed Bath Beyond stock falls 45% after offering

Bed Bath Beyond's BBBY stock fell more than 45% on Tuesday, a day after the retailer announced an equity offering to raise as much as 1.025 billion.

One analyst labeled the company's move as a last ditch effort to secure its future. According to Jaime Katz of Morningstar, the timing of the offering seems relatively opportunistic given the stock's 90% plus price runup Feb. 6, we think the capital allocation choices under duress are still poor. The analyst has a Sell rating on the stock.

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

According to S 3 Partners, short interest at about 53% of the float is heavily shorted, with short interest at around 53% of the float.

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

The company warned in a recent regulatory filing that it had been 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 that were reminiscent of the 2021 meme craze have regained popularity so far this year.

GameStop GME and AMC AMC are both up since the beginning of 2023. On Monday, AMC was briefly stopped for volatility as the stock climbed as much as 19%. On Monday, the shares were 11% higher.

Bed Bath Beyond stock is on an upward trend after hitting a 52 week low of $1.27 on January 6th. The shares were around $3 a piece on Tuesday afternoon.

Over the last 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 small-cap, lesser-known names like BBAI soared 18%, and the voice AI company SoundHound SOUN increased 42%. All three stocks gave back gains on Tuesday.