The retailer turned meme stock Bed Bath & Beyond announced in a filing that it would sell shares in an undisclosed amount, which caused a decline in the company’s share price.
In premarket trade, the shares decreased 19%.
“We may offer, issue and sell shares of our common stock from time to time,” in a filing to the SEC on Wednesday, the business made a statement. The company may sell the securities listed in one or more offers using the shelf method.
“Each time we offer securities, we will provide a prospectus supplement that will contain specific information about the terms of that offering,” the document stated.
The document also states that the business intends to use any net revenues from the sale of securities for “general corporate purposes,” which could include paying off debt, financing potential acquisitions, or share repurchases.
Incoming turnaround strategy
The filing was made just hours before Bed Bath & Beyond was scheduled to reveal its Wednesday turnaround strategy in an effort to regain the trust of customers, investors, and suppliers. In order to obtain urgently required funds, several investors have urged the shop to take advantage of its status as a meme by issuing stock.
The business had previously stated that it was collaborating with lenders and financial experts to improve its balance sheet. The retailer’s net loss increased in the most recent quarter, and as of the end of May, it had less cash than it did at the same time last year ($100 million against $1.1 billion).
It might also be in the midst of obtaining a loan; according to a Wall Street Journal report from last week, the company and asset management Sixth Street Partners are close to finalizing the conditions of a loan worth roughly $400 million.
In addition to disclosing its financial situation, the business might also talk about its strategies for retaining customers, resolving supply chain problems, and moving inventories. Investors are particularly interested in learning more about a possible sale or spinoff of the company’s Buybuy Baby brand.
Runup of meme stocks
Shares of Bed Bath & Beyond rose in August as the ailing and severely shorted business attracted more risk-taking from so-called meme traders as a result of the general market recovery. The stock’s movement accelerated over the course of the month as tiny traders praised the stock on Reddit message boards and hedge firms were compelled to cover their wagers against it.
After activist investor Ryan Cohen liquidated his big investment in Bed Bath & Beyond, the stock fell from its highs and the enthusiasm of meme traders was somewhat dampened. The stock was still up more than 140% this month as of Tuesday’s close.