Dear BBBY Stock Fans, Mark Your Calendars for April 3

Editor’s Note: The article has been updated to clarify March 27 as the date of record for the stock split vote. Not the actual date of the stock split vote.

  • Bed Bath & Beyond (BBBY) has a stock price guarantee of $1 share through April 3.
  • The guarantee was part of a February effort to raise as much as $1 billion through preferred convertible warrants.
  • A reverse split is planned, but bankruptcy may still follow.
BBBY stock - Dear BBBY Stock Fans, Mark Your Calendars for April 3

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Bed Bath & Beyond (NASDAQ:BBBY) admitted it would have trouble with lenders if its stock price doesn’t get over $1/share by April 3.

The admission came in a filing with the Securities and Exchange Commission (SEC). Shares were due to open March 23 at about 85 cents each, with a market capitalization of $93 million.

BBBY hopes the amendment on “price failure” will secure $100 million in financing for April, under warrants for convertible preferred shares issued Feb. 7. The company last received cash under the arrangement on March 7.

BBBY Stock: A Hard Landing

BBBY has been seeking a stable landing place ever since Sue Gove became interim CEO last July.

The company announced an offering of preferred warrants in February that could raise up to $1 billion. At the time, Gove called it a “runway to execute our turnaround plan.” The offering ended a late effort to squeeze short sellers that sent the stock as high as $5.86 per share on Feb. 6.

The financing plan may be threatened if BBBY stock becomes a “penny stock,” consistently selling for under $1 per share. It dropped below that level on March 17 and hasn’t returned to it since.

Gove’s latest attempt to buy time is a reverse stock split, the date of record is set for March 27, but no official date has been set yet for the vote. Reports of the company’s imminent demise have been swirling all year.

The retailer’s most recent earnings report only runs through November. Its Christmas season report is due April 12. Analysts expect a loss of as much as $2.14 per share.

Gove has been closing stores to conserve cash. This includes all its Harmon beauty products stores.

Shareholders of record on March 27 will be eligible to vote on the reverse split. A date for the meeting has not yet been announced.

What Happens Next?

Companies like DollarTree (NASDAQ:DLTR), TJX (NYSE:TJX) and Burlington Stores (NASDAQ:BURL) are grabbing leases abandoned by BBBY as it falls. Failure at this point seems a likely option.

On the date of publication, Dana Blankenhorn held no positions in any companies mentioned in this article. The opinions expressed in this article are those of the writer, subject to the Publishing Guidelines.

Dana Blankenhorn has been a financial and technology journalist since 1978. He is the author of Technology’s Big Bang: Yesterday, Today and Tomorrow with Moore’s Law, available at the Amazon Kindle store. Tweet him at @danablankenhorn, connect with him on Mastodon or subscribe to his Substack.

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