Bed Bath & Beyond reportedly raises $1 billion in stock deal to get out of loan default

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Bed Bath & Beyond Inc.’s Revenge of the Mayhem stock jumped 92% on Monday, but the stock hit hard in after-hours trading as authorities tried to sell convertible shares to exit debt defaults and shut down. announced the plan. bankruptcy.

Bed Bath and Beyond BBBY,
Announced plans to sell convertible preferred stock as well as warrants to buy common shares and convertible preferred stock. The company expected to raise at least $225 million in the sale, but expected more than $1 billion, “taking into account the potential for an additional approximately $800 million of gross proceeds through the issuance of securities to holders of shares to be purchased.” The warrants were required to be exercised in future tranches of Series A preferred stock subject to certain conditions. [sic] are met.”

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Later on Monday night, after the extended trading session ended, The Wall Street Journal reported The company had initially received investor commitments to raise equity capital of $225 million, with the remaining $1 billion to be offered later, cited people familiar with the matter.

In a filing with the Securities and Exchange Commission on Monday, Bed Bath & Beyond disclosed that JPMorgan Chase & Co. JPM,
And other creditors had agreed to work with the retailer if it could raise the money. Bed Bath & Beyond disclosed in late January that it was in default on loans it had asked to accelerate payments and other demands, but the bank was willing to waive or cancel those demands and use the proceeds from the offering. agreed to renegotiate the retailer’s credit facilities in exchange for , according to Monday’s filing.

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The beleaguered retailer was expected to file for Chapter 11 bankruptcy, but that didn’t stop its stock from enjoying a sharp rise to start the year. Taking into account Monday’s gains, shares of Bed Bath & Beyond are up 133% since the start of the year. had stock stopped twice Intraday gains climbed up 130% in Monday afternoon trading before ending with a further 92% gain, but shares fell more than 30% in after-hours trading on the news released Monday afternoon.

Bed Bath & Beyond had previously acknowledged a delisting notice due to late quarterly filings, but said Monday it was no longer an issue because it filed quarterly documents. Bed Bath & Beyond also revealed a new interim chief financial officer, Holly Atlin, who works for AlixPartners, which the retailer uses as an advisor. Atlin replaces Laura Crossen, who will resume her role as Chief Accounting Officer and Senior Vice President of Finance.

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What’s next for Bed Bath & Beyond after defaulting on its loans?

Other “classic” meme stocks also enjoyed a surge in Monday afternoon activity. Shares of AMC Entertainment Holdings Inc. AMC,
Halted briefly at 3:28 p.m. ET, shares rose about 12% before resuming trading at 3:33 p.m., though they were up more than 20% on Monday.

Shares of fellow mem stock GameStop Inc. GME,
The trading session saw a bullish move as well, with gains of over 7% on the day after a gain of 11.8% earlier.

GameStop’s stock is up 29% on the year, while AMC’s is up 67%, another sign of the market’s bullishness.

Investors have been eager this year to embrace distressed companies. Bed Bath & Beyond’s 133% stock surge thus far outstrips the 183% rally seen in Carvana company CVNA’s shares in 2023.
The used car stock saw a 91% decline in 2022 amid concerns about the company’s debt and liquidity levels.

See more: Caravana stock has best week ever as ‘meme-like’ run continues

Nordstrom Inc. jwn shares,
Which now counts activist Ryan Cohen among its investors, returned to trading Monday but is up 50% so far in 2023. Cohen, Chewy Inc. CHWY is the co-founder,
took a stake in GameStop in 2020 and began agitating for change at the videogame retailer.

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