Plans to raise dollar 1B sink Bed Bath & Beyond stock 45%.

By Justin Jones On Feb 7, 2023

Plans to raise dollar 1B sink Bed Bath & Beyond stock 45%. The stock of troubled retailer Bed Bath & Beyond (BBBY) dropped by more than 45 percent on Tuesday, a day after the company disclosed plans to conduct an equity offering to raise as much as $1.025 billion.

One analyst has described the step that the corporation is taking as a “last desperate effort to guarantee its future.”

“While the timing of the offering seems opportunistic, given the stock’s 90%-plus price runup on February 6, we think the capital allocation choices being made under duress are still poor,” Jaime Katz of Morningstar wrote in a note to investors. “While the timing of the offering seems opportunistic, given the stock’s 90%-plus price runup on February 6.” The financial analyst recommends that investors short the stock.

As a recent rally in the nearly bankrupt company gained momentum, BBBY increased by 92% on Monday ahead of the announcement of the preferred stock and warrants offering.

According to statistics gathered by S3 Partners, there is a significant amount of short interest placed on the retailer’s shares, with the short claim standing at almost 53% of the float.

Bed Bath & Beyond is attempting to save as much cash as possible as the company is on the verge of filing for bankruptcy due to the more than one billion dollars in debt and losses it will have accumulated by the end of 2022.

In a recent filing with the regulatory agency, the business stated that it has been sent a default notice from JPMorgan and does not have sufficient funds to repay its obligations.

Some of the prominent trades during the “meme craze” in 2021 have seen a resurgence in popularity so far this year, which has led to an increase in demand for meme stocks overall during the past month.

GameStop (GME) and AMC (AMC) have had their stock prices rise since the beginning of 2023. On Monday, trading in AMC was temporarily halted because of the stock’s volatile performance, which saw gains of up to 19%. At the market’s close on Monday, shares were up 11%.

After reaching a 52-week low of $1.27 on January 6th, the share price of Bed Bath & Beyond has been on an upward trend since then. The share cost was approximately $3 while the market was open on Tuesday afternoon.

In the most recent month, investors have been more willing to take risks, as evidenced by the fact that AI-related equities have joined beaten-up tech companies as the most outstanding winners and meme names from years ago.

On Monday, shares of artificial intelligence manufacturer C3.ai (AI) increased by 6%, while shares of smaller-cap, less well-known companies such as BigBear.ai (BBAI) surged by 18% and shares of voice AI provider SoundHound (SOUN) jumped by 42%. On Tuesday, each of the three stocks returned some of their gains.