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Bed Bath & Beyond announces share sale: buy this meme stock?

Shares of Bed Bath & Beyond Inc (NASDAQ: BBBY) crashed nearly 50% on Tuesday after the struggling retailer announced plans of a share sale.

Neil Saunders’ take on the new development

The Union-headquartered firm expects wants to raise over $1.0 billion with the said offering in a bid to avoid filing for bankruptcy. Reacting to the development, Neil Saunders – Managing Director of GlobalData said:

BBBY is desperate to avoid declaring Chapter 11 without having sufficient liquidity or potentially interested buyers. If it does, any bankruptcy judge could force it into Chapter 7 liquidation where the company would effectively be terminated.

The retail chain also said this morning that one of its lenders, Sixth Street Partners, has agreed to a $100 million loan as well. Bed Bath & Beyond shares tumbled today after a meme stock rally that saw them nearly double earlier this week.

Are Bed Bath & Beyond shares worth buying?

Also on Tuesday, Wedbush Securities analyst Seth Basham slashed his price target on Bed Bath & Beyond shares to “zero dollar”. Commenting on the idea of investing in this stock on today’s decline, Saunders also said:

Many investors will be deterred by incredibly weak balance sheet, mountain of debt, and a business that’s fundamentally broken. However, there may be some less rational meme stock crowd who will take the bait.

In its latest reported quarter, the chain of domestic merchandise retail stores lost $385 million versus $158 million expected (read more). It also revealed plans of closing another 150 stores this past Monday.

Even if Bed Bath & Beyond succeeds in raising new equity, it’ll only bring it funds to conjure a successful turnaround in a few more quarters only.

The post Bed Bath & Beyond announces share sale: buy this meme stock? appeared first on Invezz.

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