Why Is Bed Bath & Beyond (BBBY) Stock Down 32% Today?

  • Bed Bath & Beyond (BBBY) stock is falling after announcing a proposed preferred share offering.
  • The company intends to raise around $1 billion from the offering.
  • It could use this money to pay back a large portion of its debt.
BBBY Stock - Why Is Bed Bath & Beyond (BBBY) Stock Down 32% Today?

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Bed Bath & Beyond (NASDAQ:BBBY) stock is falling on Tuesday after the retailer revealed plans to raise about $1 billion.

That plan from the company includes the sale of preferred stock as a way to increase funds. However, the company may have spooked investors with a warning in the U.S. Securities and Exchange Commission (SEC) filing.

That includes the following statement in its prospectus filing:

“Investing in the offered securities involves risks. You should carefully read and consider the information in this prospectus, the applicable prospectus supplement and the risk factors described in any applicable prospectus supplement and/or in our periodic and other reports and other information that we file with the Securities and Exchange Commission before investing in our securities.”

BBBY’s Plans for the Funds

Bed Bath & Beyond says it intends to use funds raised from the preferred stock offering for general corporate purposes. That may include the reduction of its debt. That’s not much of a surprise considering the company holds more than $1 billion in debt. It’s also at risk of defaulting on some of that money owed.

Shares of BBBY stock are falling 31.7% today as some 14 million shares change hands. The company’s daily average trading volume is about 43 million shares. Year-to-date, the stock is up 153.7%.

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On the date of publication, William White 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.

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