Bed Bath & Beyond shares crater after meme stock files share offering of undisclosed amount

Signage outdoors a Bed Bath & Beyond retail retailer in New York, Aug. 25, 2022.

Gabby Jones | Bloomberg | Getty Images

Bed Bath & Beyond shares dropped after the retailer turned meme stock mentioned in a submitting it might promote shares of an undisclosed amount, it introduced $500 million in new financing and plans for layoffs.

The shares fell 24% in premarket buying and selling.

“We may offer, issue and sell shares of our common stock from time to time,” the corporate mentioned within the Wednesday submitting to the SEC. Under the shelf course of, the corporate can promote the securities listed in a number of choices.

“Each time we offer securities, we will provide a prospectus supplement that will contain specific information about the terms of that offering,” the submitting mentioned.

The doc additionally notes that the corporate plans to make use of internet proceeds from any sale of securities for “general corporate purposes” together with repaying debt, share repurchases or financing potential acquisitions.

Later within the morning, the corporate introduced it had secured a $375 million mortgage, partially of greater than $500 million in new financing together with a $1.13 billion asset-backed revolving credit score facility. IT will even look to chop prices by closing shops and shedding workers, it mentioned. The information despatched shares even decrease.

Turnaround plan incoming

The submitting comes simply hours earlier than Bed Bath & Beyond is predicted to stipulate a turnaround plan Wednesday in an try and win again the arrogance of buyers, traders and suppliers. Some traders had been calling for the retailer to capitalize on its meme standing by issuing stock to lift much-needed money.

The firm had mentioned beforehand that it was working with monetary advisors and lenders to strengthen its steadiness sheet. In the newest quarter, the retailer’s internet loss widened, and the corporate ended May with about $100 million in money, down from $1.1 billion a yr in the past.

It additionally could also be within the course of of securing a mortgage — The Wall Street Journal reported final week that the corporate and asset supervisor Sixth Street Partners are nearing last phrases on a mortgage of practically $400 million. Sixth Street and Bed Bath didn’t reply to CNBC’s requests for remark.

Aside from its financials, the corporate may additionally handle the way it plans to lure again buyers, shore up points with its provide chain and transfer stock. Investors are additionally awaiting extra details about a possible sale or spinoff of its Buybuy Baby model.

Meme stock runup

Bed Bath & Beyond shares surged in August as an total market comeback inspired so-called meme merchants to take some threat once more within the troubled and heavily-shorted retailer. The stock’s transfer gained momentum all through the month as small merchants talked up the stock on Reddit message boards and hedge funds had been pressured to cowl their bets towards it.

The enthusiasm of meme merchants was dented a bit and the stock got here of its highs after activist investor Ryan Cohen offered his sizable place in Bed Bath & Beyond. The stock by means of Tuesday’s shut was nonetheless up greater than 140% this month.

CNBC’s Melissa Repko contributed reporting.

This is a growing story. Check again for updates.


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