Bed Bath & Beyond $1 Stock Collapse

By Douglas A. McIntyre Published Mar 15, 8:30AM EDT

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Bed Bath & Beyond $1 Stock Collapse — © bernie_photo / iStock via Getty Images

Bed Bath & Beyond Inc. (NASDAQ: BBBY) should no longer be in business but still is. Its stock trades below $1 a share and should trade at zero. (Here are 25 brands customers are abandoning.)
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Shockingly, Hudson Bay Capital Management will put $100 million into the company. When the price dropped below, it did not have to. According to The Wall Street Journal, it reset the price at which the deal could be done from $1.25. The transaction is part of a larger funding round, the newspaper reports: “The lower threshold will allow the company to collect an additional $100 million by selling equity warrants to Hudson Bay and other investors, bringing the total amount Bed Bath & Beyond has raised since last month to $460 million.:
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What do these financiers see in Bed Bath & Beyond? It is anyone’s guess. Presumably, they think sales will rebound, or at least the bottom line will. The company has shuttered stores and reduced other costs. However, it ran into inventory problems over the holidays due to payment problems, which should have undermined any recovery in revenue. January and February are not supposed to be good months for most retailers.
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In its most recently reported quarter, the retailer’s results were dismal. Revenue dropped 32% to $1.3 billion. The net loss was $392 million for the period. Sue Gove, the CEO, said, “At the beginning of the third quarter, we initiated a turnaround plan anchored on serving our loyal customers, following a period when our merchandise and strategy had veered away from their preferences.” Hard to do that through a series of layoffs and with fewer stores.
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Morale at Bed Bath & Beyond has to be terrible, which, again, makes a turnaround difficult. With more stores closed, the retail footprint has gotten smaller, which makes it hard for some customers to get to locations.

Bed Bath & Beyond is dead. So, why does the money keep coming?

About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.