Bed Bath & Beyond shares are down almost 20% in premarket trading on Wednesday after the firm filed a form S-3 shelf registration.
This form is submitted when a business intends to raise fresh capital. In this instance, Bed Bath & Beyond has not specified the amount of stock it intends to sell.
The filing states,
“We may offer, issue, and sell shares of our common stock from time to time.”
BBBY said, “We expect to use the net proceeds from any sale of securities mentioned in this prospectus for our general corporate goals, which may include paying off our debt, buying back our common stock in the future, and paying for possible acquisitions.”
Before the market opened, shares of a popular meme stock were trading 6% higher. This was because investors were looking forward to a strategy update from the company later today.
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a Morgan Stanley) analyst stated earlier this week that BBBY faces “crucial months ahead” and that the Christmas season has “never been more significant.”
He said that today’s strategic update call should be all about how BBBY is supposedly closing deals to get $375 million to $400 million in funding.
“According to our calculations, BBBY will expend around $1 billion in cash in ’22 and may require approximately $800 million in liquidity before the holidays for inventory, payables, and operations. “If verified, there would likely be expensive costs associated with securing such finance, such as a high interest rate or a PIK (payment-in-kind),” said the analyst in a client note.
The expert said that for BBBY to get this kind of money would be a “crucial first step.”
