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Why Bed Bath & Beyond (BBBY) Stock Just Hit a 21st-Century Low

  • Bed Bath & Beyond (BBBY) is truly testing its investors.
  • The company’s share prices just hit a new low for the century.
  • A quick look at the retailer’s many problems reveals why.
"BBBY stock" - Why Bed Bath & Beyond (BBBY) Stock Just Hit a 21st-Century Low

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Just when investors think Bed Bath & Beyond (NASDAQ:BBBY) can’t fall any further, it proves them wrong. To say this year has been difficult for the retailer would be an understatement. Even with multiple noteworthy surges, BBBY stock is still down more than 81% for the year. But today brought some of the worst news yet when Bed Bath & Beyond hit its lowest price not just of the year but of the century.

At the current price of $2.80, BBBY stock reached its low level in 29 years, since 1993. As bleak as this looks, it’s far from the only problem facing the company. And it’s giving investors cause to run the other way.

Let’s unpack the important issues pushing the stock down today and examine what investors can expect as it moves forward.

What’s Happening With BBBY Stock

Bed Bath & Beyond began trading on the Nasdaq in 1992. As noted, it traded at roughly $2.80 around July 1993 before rising and continuing to climb. In fact, the stock wouldn’t dip by too much until the events that sparked the stock market crash of 2008. It recovered from that plunge but this year, things don’t look so good. Hitting a century low is hardly the worst of the problems pushing BBBY stock down. Financial commentator Jeff Macke tweeted the following earlier today:

As Macke highlights, the company is under tremendous strain. It has been dealing with supply-chain problems for weeks as it struggles to keep shelves stocked for the holiday shopping season. Leading up to Black Friday 2022, the Wall Street Journal reported that more than 40% of the retailer’s inventory was out of stock. According to DataWeave, the analytics firm supplying this data, that number has almost doubled since the year’s first half.

In September 2022, the company announced plans to close 150 stores across the U.S. But since then, even more reports of stores shutting down have surfaced, often in popular areas such as New York City and Silicon Valley. Closing numerous stores doesn’t seem to be helping its inventory problems, though.

Additionally, the WSJ has reported that in October, the company’s bondholders moved to organize out of concern for Bed Bath’s future. As the outlet noted, “Bondholders are wary about a potentially coercive exchange deal that raises new secured debt but weakens other creditors’ claims on Bed Bath & Beyond’s assets, people familiar with the matter said.”

These concerns were driven primarily by declining sales and inventory problems, two things that have only gotten worse in the months since this news broke.

The Bottom Line

Another factor that stands to push BBBY stock down even further is the fact that fellow retailer Big Lots (NYSE:BIG) recently announced plans to close down a significant number of stores, casting further doubt over the future of Bed Bath & Beyond’s industry. On top of it all, the company is still facing a class action lawsuit stemming from investor Ryan Cohen’s role in the short squeeze of August 2022 that sent BBBY stock up only to see it crash.

This meme stock had already given investors plenty of reason to sell before it hit a low for the century. But today’s news should be a good reminder that the stock is only destined to fall further. A market turnaround won’t help a company with no growth prospects.

On the date of publication, Samuel O’Brient did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Samuel O’Brient has been covering financial markets and analyzing economic policy for three-plus years. His areas of expertise involve electric vehicle (EV) stocks, green energy and NFTs. O’Brient loves helping everyone understand the complexities of economics. He is ranked in the top 15% of stock pickers on TipRanks.

Article printed from InvestorPlace Media, https://investorplace.com/2022/12/why-bed-bath-beyond-bbby-stock-just-hit-a-21st-century-low/.

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