We may have reached the “beyond” portion of Bed Bath & Beyond’s wild ride as a meme stock.
Bed Bath & Beyond (BBBY) stock caught the attention of meme stock traders on internet message boards like Reddit’s r/WallStreetBets in recent weeks, and since the beginning of August, saw its share value rise from less than $5 to more than $30 during the middle of the month. But over the past two weeks, its value fell to less than $9, and as of the opening bell on Wednesday, was trading at a little over $14.
However, the stock saw a precipitous drop today as the company released an investor update, saying that it has secured more than $500 million in new financing commitments and that it will be closing around 150 stores, along with reducing its corporate and supply chain workforce by roughly 20%. The update also painted a grim picture of the company’s performance during the fiscal second quarter of 2022, which ended August 27, and shows comparable sales during the quarter were down 26% year-over-year.
“We are embracing a straight-forward, back-to-basics philosophy that focuses on better serving our customers, driving growth, and delivering business returns,” said Sue Gove, Bed Bath & Beyond’s interim CEO, as a part of the update. “We believe these changes will have a widespread positive impact across customer experience, inventory assortment, supply chain execution and cost structure. The customer underpins our decisions, and we are committed to delivering what they want while driving growth, profitability, and financial returns.”
While the update may give long-term Bed Bath & Beyond investors a sense of relief, the market felt otherwise, as the BBBY stock cratered during the early trading hours on Wednesday. As of roughly 10 a.m. ET, BBBY shares were down more than 24%, and were trading at around $9.20.
Another factor fueling the BBBY sell-off is that the company announced it will sell additional shares for an undisclosed amount in a separate Wednesday filing with the SEC. The filing says that Bed Bath & Beyond “may offer, issue, and sell shares of our common stock from time to time,” and that those shares would be offered “at prices and on other terms to be determined at the time of the offering.”
Though shares of BBBY are currently in flux following the company’s recent announcements, the stock had seen a rally over the past several months after Bed Bath & Beyond replaced its CEO, saw a sizable investment by current GameStop chairman Ryan Cohen, and was also in the headlines after a 20-year-old college student, Jake Freeman, sold roughly five million shares to profit more than $100 million.