Even when it has good news to report, Bed Bath & Beyond (NASDAQ:BBBY) stock can’t catch a break. This struggling retailer has managed to shed more than 50% of its value in the past one month. That’s not to say all the company’s news has been bad, though. Today, Bed Bath announced a cash influx to the tune of $135 million.
These funds were generated through a previously announced public equity offering that included the exercise of preferred stock warrants. This may sound like good news, but the market doesn’t seem to care. BBBY stock is falling now and its outlook seems truly bleak.
Does this mean that the troubled meme stock won’t recover from its losing streak? It certainly looks that way. Let’s take a look at the recent news and assess what investors should expect from BBBY in the coming year.
What’s Happening With BBBY Stock?
Since news of the public offering proceeds broke, BBBY stock has been mostly trending downward. As of this writing, shares are down about 3% for the day and shouldn’t be expected to trek much higher. Bed Bath has proven time and time again that, even on the best days, it has trouble garnering any significant momentum — at least not enough to snap its losing streak.
News of this type of funding influx would boost a stronger company. But Bed Bath & Beyond is the opposite of strong. It has been struggling since its August crash and hasn’t shown any signs that it can turn things around. Attempts to save the company by firms like Hudson Bay have proven futile. Additionally, the threat of bankruptcy continues to hang over the company. As InvestorPlace contributor Chris MacDonald reports:
“While bankruptcy proceedings can be positive for a company looking to restructure, I think Bed Bath & Beyond is a company beyond saving. With suppliers seemingly cutting off the company and store shelves emptier than they’ve been in a long time, there are structural issues that may not be fixed overnight by a restructuring.”
With that in mind, it’s not hard to see why Bed Bath & Beyond has been ranked among meme stocks to sell. The company has the kind of problems that even a significant cash influx can’t fix, hence the performance we’ve seen from BBBY stock today.
What Comes Next?
I’ve described this company as “Bed Bath & Beyond redemption” before, but that characterization seems to become more appropriate with every news day. As today proves, even pumping money into the company can’t help shares when much bigger problems abound. As InvestorPlace’s Thomas Yeung notes, raising capital only delays the inevitable when a firm is on the fast track toward bankruptcy.
Bed Bath & Beyond appears to be beyond saving. No amount of funds seems to be able to fix the fundamental problems that have pushed BBBY stock to penny stock levels and kept it there.
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On the date of publication, Samuel O’Brient 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.
