Bed Bath & Beyond stock continues to sink amid hopes to raise $1 billion in stock sale
The Yahoo Finance Live team discusses the latest movement downward for Bed Bath & Beyond stock.
SEANA SMITH: Shares are sinking today. Looking at a loss of nearly 50% right now, its worst drop ever.
Now this comes on plans to raise a billion dollars. The stock was halted in earlier trading for volatility. Bloomberg reporting that Hudson Bay Capital is the anchor investor of this share sale.
Today's drop of course following yesterday's massive rally. We're looking at gains of more than 90% in the stock yesterday, but this last-ditch attempt here to avoid a complete collapse might not be enough. Wedbush analyst Seth Basham, he was out with a note today calling the equity financing a, quote, "last gasp" before filing for bankruptcy protection. Now, Basham cut his price target on the stock to zero, writing in a note, quote, "the additional capital provides the company with just a few more quarters of room.
You're looking at losses here of just about 50% this afternoon. And, Allie, this goes back to what we've all talked about time and time again just in terms of the path forward for Bed Bath & Beyond. Chapter 11 seems inevitable at this point. Yes, this might help the company avoid it for a quarter or two, but just in terms of a turnaround strategy, all of their options seem to be out the window at this point.
ALEXANDRA CANAL: I totally agree. This is a company where the hits just keep on coming. It announced closures of 150 stores on top of additional closures of 87 stores last week. The brick-and-mortar picture just looks very bleak. It seems like Bed Bath & Beyond, they can't compete with the big guys, your Walmarts, your Targets.
And then on top of that, they've really struggled to adapt to the online marketplace as well on top of pandemic headwinds. And I know we have a lot of BBY fans or maybe former fans in the newsroom that--
DAVE BRIGGS: I'm a fan.
SEANA SMITH: I'm a fan. I'm a huge fan.
ALEXANDRA CANAL: You're still a fan.
DAVE BRIGGS: I love Bed Bath, man.
ALEXANDRA CANAL: I've heard that the quality has diminished--
SEANA SMITH: Oh yes.
ALEXANDRA CANAL: --over time.
SEANA SMITH: That's very fair to say.
DAVE BRIGGS: The inventory has been a nightmare.
ALEXANDRA CANAL: Right. And if you don't have the inventory, how the heck are you going to compete? I can go on Amazon and get anything I want for my apartment.
DAVE BRIGGS: But now's the time, man. Everything is on sale now. I mean, don't even need your 20% coupon.
ALEXANDRA CANAL: That is a good point.
SEANA SMITH: It's great for the consumer--
DAVE BRIGGS: Everything's on sale.
SEANA SMITH: --not for the investor.
ALEXANDRA CANAL: Exactly.
DAVE BRIGGS: Not good for you investors.
ALEXANDRA CANAL: So to me, it just seems inevitable that bankruptcy is going to be in the picture.