Bed Bath and Beyond hits record low after latest stock offering

Yahoo Finance's Ines Ferre checks out Bed Bath & Beyond shares as the struggling retail chain attempts to raise up to $300 million by selling its stock.

Video Transcript

DAVE BRIGGS: Bed, Bath & Beyond ending the day sharply lower after it announced plans to raise $300 million through a new stock offering. You can see a 26% hit to a $0.59 stock. Ines Ferre here with the details. Ines, things not looking so good for the retailer, huh?

INES FERRE: Not at all, and right now, it is trading like a penny stock because it is trading below $1 a share, as you were just mentioning. Bed, Bath & Beyond announcing that it will be selling shares in the open market. This is after its deal with Hudson Bay Capital is now no longer. Remember that back in February, the company had announced that it had made a deal with the hedge fund in order to raise funds in order to keep going.

And now, Hudson Bay Capital has walked away from that deal, according to the sources that we spoke with, because of the spiraling downward impact of these stock-- of the stock and how it's-- yesterday, it closed at $0.80 a share. It's trading at an all-time low right now.

Look, Bed, Bath & Beyond says it needs this money from this offering, equity offering, in order to keep going, in order to afford its inventory, in order to keep operating, paying down its debt. And if it does not receive the funds from this equity offering, then it will have to file for bankruptcy protection. We have heard this warning before. Some of the risks that it's talking about right now is that it can't hold these relationships with vendors, unfavorable relationships with vendors because, right, if the ship is sinking, then who wants to make a deal with you?

Also, even retaining talent, it has been difficult for the company to retain talent. And just to mention, in case people don't know when this company went public, Bed, Bath & Beyond went public back in 1992 at $17 a share. It has-- this is the lowest that it's ever been right now. You had Ryan Cohen, the activist investor that was involved temporarily with this company, he dumped his stake last year. This could be a case study.

DAVE BRIGGS: Indeed, it could. $35 in January of '21, Seana. 35 bucks--

SEANA SMITH: 35, yeah.

DAVE BRIGGS: --to $0.59.

SEANA SMITH: It's been a quick decline. I mean, it's hard to figure out how they are going to avoid bankruptcy, but we'll see. It seems like a sure thing at this point. All right, Ines, thanks so much.