Activist company

Bed Bath & Beyond shares jump nearly 15% after company reportedly secures new funding

Topline

Shares of Bed Bath & Beyond, a favorite of the meme stock crowd that rose this month, jumped nearly 15% on Wednesday after the company reportedly secured a much-needed loan deal to shore up its balance sheet and repay its debt.

Highlights

Shares of Bed Bath & Beyond rose nearly 15% to $10 a share, rebounding from losses last week as investors cheered a report from The Wall Street Journal that the company has succeeded in finding financing to increase its liquidity.

The home goods retailer, which has faced inventory issues and declining sales, was seeking around $375 million to boost cash levels and pay off existing debt, although final terms of the agreement are not yet clear, according to the Log.

Shares of Bed Bath & Beyond surged as retail investors celebrated the news, with the stock easily the most popular mention in Reddit’s WallStreetBets chatroom on Wednesday, according to data provider Quiver Quantitative.

The good news comes after Wall Street analysts warned for months that the retailer faced “urgent” issues like high cash burn and was in desperate need of new funding.

Still, stocks have soared this month as meme stock traders from social media sites like Reddit pile into the stock, which at one point was up 300% for the month. August before paring gains somewhat.

Shares of Bed Bath & Beyond fell sharply again last week after billionaire activist investor and GameStop chairman Ryan Cohen announced he would sell his roughly 10% stake in the company.

Key Context:

Although the retailer’s stock has jumped more than 70% so far this month on the back of enthusiasm from retail investors, it remains down 39% for the year, outpacing the remainder of the decline in 13% of the broader S&P 500. The recent rally began shortly after Bed Bath & Beyond’s quarterly earnings report in June: although overall sales fell 23%, the stock quickly rebounded thanks to a boost from stock traders which drove up the stock price.

To monitor :

The majority of Wall Street analysts covering Bed Bath & Beyond have a “sell” rating on the stock, remaining skeptical of the retailer’s ability to revive its struggling business and warning of “unrealistic” stock price valuations. shares. While Cohen’s stock purchase from March has helped boost retail investor enthusiasm, analysts have warned that his recent decision to sell his entire stake in the company could remove a “leg of key support” for Bed Bath & Beyond as it seeks to consolidate funding.

Further reading:

Bed Bath & Beyond plummets over 40% after investor Ryan Cohen sells his entire stake (Forbes)

Bed Bath & Beyond jumps 29% as Meme-Stock traders increase shares despite analyst warnings (Forbes)

Bed Bath & Beyond surges nearly 40% as retail traders replenish in Meme stocks (Forbes)

Bed Bath & Beyond Stock jumps more than 20% after new CEO buys 50,000 shares (Forbes)