Based on the current facts, Bed Bath & Beyond (NASDAQ:BBBY) could soon file for Chapter 11 bankruptcy. The struggling retailer has issued a slate of concerning news in the past month, including third-quarter earnings, layoffs and a going concern warning. Bed Bath itself has stated that it will explore all available strategies to restore its going concern as well, such as a sale of assets, issuing more debt or equity and relief under U.S. Bankruptcy Code. Yet, despite this news, BBBY stock is trading in the green today.
For Q3, sales tallied in at $1.259 billion, down 33% year-over-year (YOY). Unsurprisingly, the company failed to turn a profit, reporting a net loss of $393 million or an earnings per share (EPS) loss of $3.65.
Earlier this week, the company also began a round of layoffs, which included Chief Transformation Officer (CTO) Anu Gupta. The exact number of layoffs was not disclosed, although CEO Sue Gove noted that Bed Bath would cut its workforce “across our corporate, supply chain and store portfolio.”
Retail investors have taken a liking to BBBY stock amid this ongoing situation. Today, shares of BBBY are up roughly 20% with a high short interest as well. S3 Partners reports that its short interest as a percentage of float is a significant 52.07%, equivalent to a monetary value of $82.7 million. Bed Bath’s short interest tallies in as the “second largest short interest for stocks with over $10 million of short interest.”
5 Investors Betting Big on BBBY Stock
Tracking institutional ownership is important, as these large investors provide liquidity and support for stocks. During Q3, 196 13F filers reported owning BBBY stock, a decrease of 20 filers from the previous quarter. Meanwhile, the institutional put/call ratio sits at 0.91, up from 0.74. That’s equivalent to 23.42 million puts and 25.85 million calls, implying a somewhat neutral options stance. With that in mind, let’s take a look at Bed Bath & Beyond’s top shareholders:
- BlackRock (NYSE:BLK): 11.48 million shares. BlackRock sold 1.02 million shares during Q3.
- Vanguard: 8.20 million shares. Vanguard purchased 273,384 shares during Q3.
- State Street (NYSE:STT): 3.09 million shares. State Street sold 210,861 shares during Q3.
- Allianz Asset Management: 1.75 million shares. Allianz sold 33,803 shares during Q3.
- Geode Capital Management: 1.35 million shares. Geode sold 125,109 shares during Q3.
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On the date of publication, Eddie Pan did not hold (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.
