Bed Bath & Below: Shares Plunge On New Stock Offering, Job Cuts, 150 Store Closures

Bed Bath & Below: Shares Plunge On New Stock Offering, Job Cuts, 150 Store Closures

Update: Following the SEC filing to sell more shares, Bed Bath & Beyond released a statement about its strategic and business update that will result in store closures and a reduction of its workforce. The home-goods retailer also announced new financing commitments. 

Bed Bath & Beyond will close approximately 150 lower-producing banner stores. It will also be exiting a third of its Owned Brands by discontinuing three of its nine labels (Haven, Wild Sage, and Studio 3B). 

Another cost-cutting measure will be the reduction of 20% of its workforce. 

The company also announced it had secured financing commitments of more than 500 million in new financing, including a newly expanded $1.13 billion asset-backed revolving credit facility and a new $375 million “first-in-last-out” facility. 

Shares extended declines on the second part of the news following the S-3 shelf filing earlier this morning. Shares are down more than -22%. 

Activist investor Ryan Cohen unloaded his shares just before all of this news — how much of his decision to exit the ‘meme stock’ was based on what was coming down the pipe?

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Bed Bath & Beyond shares plunged premarket Wednesday as retailer traders who piled into the ‘meme stock’ were greeted with an unwelcoming SEC filing by the home-goods retailer to sell shares of its common stock. 

“We may offer, issue and sell shares of our common stock from time to time,” the form S-3 shelf filing read. 

Under the “Use Of Proceeds” section of the filing, the company said it would “use net proceeds from any sale of the securities described in this prospectus for our general corporate purposes, which may include repayment of our indebtedness, future repurchases of our common stock and financing possible acquisitions.” 

Shares in the meme stock plunged as much as 21% as of 0715 ET on fears stock sales would drown the equity. 

It’s been a rollercoaster of a ride for traders after the stock jumped from a low of $5 at the beginning of August to an intraday high of $30 by mid-month. The stock has since round-tripped after activist investor Ryan Cohen dumped his stake and worries over company finances. 

30-day volatility in the stock surged to a record high this month on the wild swings. 

More than 2 billion shares have changed hands in recent weeks as retail traders flooded into a company with cash burn issues. 

Tyler Durden
Wed, 08/31/2022 – 07:56

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