Bed Bath & Beyond Plans $1B Stock Offering, Shares Down 45%

Bed Bath & Beyond (BBBY) shares are down 45% on Tuesday morning after the struggling retailer announced plans to raise up to $1.025 billion through a share offering.

BBBY was up 92% ahead of the announcement, which was made after the market closed on Monday, as a recent rally in the near-bankrupt company gained further momentum.

The retailer’s shares are heavily short, with short interest at about 53% of the free float, according to data compiled by S3 Partners.

Bed Bath & Beyond has been trying to save cash as it teeters on the brink of bankruptcy after racking up more than $1 billion in debt and losses by the end of 2022.

The company warned in a recent regulatory filing that it has been hit by a reminder from JPMorgan and does not have sufficient funds to pay off its loans.

Meme stocks have rallied overall over the past month as some of the trades reminiscent of the “meme craze” of 2021 have regained popularity so far this year.

GameStop (GME) is up 29% year-to-date and shares of AMC (AMC) are up 68% since the start of 2023. On Monday, AMC was briefly halted for volatility as the stock surged as much as 19%. Shares closed 11% higher on Monday.

Bed Bath & Beyond shares hit a 52-week low of $1.27 on Jan. 6, and shares have more than quadrupled since then.

Investors have taken a risk-on approach over the past month, with AI-related stocks seen alongside struggling tech names as the biggest winners alongside meme names from yesteryear.

Artificial intelligence maker C3.ai (AI) is up 6% on Monday, while smaller, lesser-known names like BigBear.ai (BBAI) are up 18% and speech AI company SoundHound (SOUN) is up 42% gained.

Ines is Senior Business Reporter for Yahoo Finance. Follow her on Twitter at @ines_ferre

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