Bed, Bath & Beyond is looking to capitalize on its recent share surge with a new stock offering as it prepares to update investors on its turnaround plans.
Bed, Bath & Beyond (BBBY) – Get Bed Bath & Beyond Inc. Report shares fell sharply Wednesday after the struggling home goods retailer filed for permission to sell more shares as part of a capital raising plan just hours ahead of unveiling its long-awaited turnaround plans.
Securities & Exchange Commission filings show Bed, Bath & Beyond is seeking permission for the sale of an undisclosed amount of common stock as it moves to capitalize on a 140% surge in the company’s share price over the past month while adding to its thinning overall liquidity.
The stock’s trajectory was disrupted last week, as well, by the sale of 9.45 million by activist investor Ryan Cohen, who dumped his entire stake in the group, netting around $60 million from the retail-powered rally.
“These securities may be offered together or separately and in one or more series, if any, in amounts, at prices and on other terms to be determined at the time of the offering and described in an accompanying prospectus supplement,” the company said.
Bed, Bath & Beyond shares were marked 17.75% lower in pre-market trading immediately following news of the share sale filing to indicate an opening bell price of $9.95 each.
Recent data from S3 Partners suggests short interest in Bed, Bath & Beyond shares comprises around 38% of the outstanding float, with bets against the retailer totaling more than $385 million.
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The retailer, which reportedly secured around $375 million in loan financing last week, will update investors on its turnaround plans later this morning, with a focus on both it near-term financing needs and any potential sale of its lucrative buybuy Baby division.
Bloomberg News reported last week that some Bed, Bath & Beyond supplies are either restricting or halting shipments to the retailer after it fell behind on payments amid a broader cash-flow squeeze. The company said in June that comparable sales over its May quarter fell 27% from last year, pulling overall revenues to just under $1.46 billion.