There’s a double shot of news concerning Bed Bath & Beyond (NASDAQ:BBBY) today, but it’s not necessarily what BBBY stock investors want to hear. First, the company disclosed an “at-the-market” equity offering program in a recently filed prospectus. Furthermore, Bed Bath & Beyond revealed the preliminary results for fiscal 2022’s fourth quarter — and they didn’t live up to Wall Street’s expectations.
Bed Bath & Beyond’s current investors probably aren’t happy about this. Reportedly, the company is preparing to sell as much as $300 million worth of its shares. Investors may be concerned about the potential dilutive impact of this equity offering.
Also, per a report from Seeking Alpha, Bed Bath & Beyond intends to terminate its “previous public equity offering and all outstanding warrants for Series A Convertible Preferred Stock associated with that offering.” Plus, in order to “secure additional capital,” the company has “entered into a stock purchase agreement and a registration rights agreement” with B. Riley Principal Capital II.
What’s Happening With BBBY Stock?
Clearly, investors aren’t very pleased with these developments. BBBY stock is down more than 16% as of this writing, trading for around 67 cents.
BBBY shareholders aren’t only reacting to the equity offering news, however. They have also caught wind of the company’s just-released preliminary Q4 results.
The analyst consensus estimate for Bed Bath & Beyond’s quarterly net sales was $1.41 billion. However, the company just announced its estimate for roughly $1.2 billion in net sales. Not only that, but Bed Bath & Beyond projects that its Q4 2022 comparable sales will decline by 40% to 50%, “with continued negative operating losses,” per Seeking Alpha.
These are certainly tough pills to swallow. Shareholders now have to assess the potential impact of a $300 million share offering. Additionally, they’re in a sour mood as the company’s preliminary quarterly results disappoint.
It’s not difficult to see why many financial traders are selling BBBY stock today.
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On the date of publication, David Moadel 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.