As if Bed Bath & Beyond (NASDAQ:BBBY) hasn’t seen enough bad news already. The home furnishing retail has been gradually trending downward for months. While BBBY stock has seen slight gains driven by retail trader momentum, these gains haven’t persisted long enough to generate any enduring growth. This has led to speculation that the company may not survive, as the possibility of bankruptcy continues to cast dark shadows over it.
Now there’s even more reason to be skeptical about the troubled meme stock’s growth prospects. Data reported by Fortune indicates that one of the company’s primary consumer bases is losing faith in it. Engaged couples are removing Bed Bath & Beyond from their wedding registries in concerning numbers.
Does this mean that the company’s race to the bottom is moving even faster than expected? Let’s take a closer look at yesterday’s report and assess what investors should be expecting.
The (Wedding) Party May Be Over for BBBY Stock
BBBY stock started this week off well, rising steadily after markets opened this morning. Unfortunately, its momentum seems to be running out, as the stock has fallen from its earlier gains of more than 30%. As of this writing, it is up 18% for the day and isn’t likely to rise anymore. This performance can be chalked up to retail investor hype, spurred by the rumor that Ryan Cohen, a respected name in the meme stock community, could be getting involved with the company again. However, as history has taught us, social media momentum is superficial and inevitably runs out.
Regardless of what Cohen does, yesterday’s announcement should worry Bed Bath & Beyond shareholders more. According to Fortune, thousands of couples have opted to remove items from the struggling retailer from their wedding registries over the past few months. Per the article:
“Since January, around 200 couples have emailed Zola’s customer service team to ensure Bed Bath & Beyond items they had listed on their online wedding registries were properly removed. Thousands of other couples simply removed Bed Bath & Beyond items on their own without going through Zola’s customer service. Zola says the decline is likely related to the retailer’s financial troubles. More than 2 million couples have used the registry website since it was founded in 2013.”
It’s not hard to see what’s going on here. Bed Bath & Beyond’s client base is giving up on the company. Couples getting married this year have made it clear that they don’t think the company will be operating long enough to provide the wedding gifts they are requesting. This means that the retailer is losing its share of a lucrative market at a time when it can’t afford to lose anything. If it persists, BBBY stock will fall even further.
What Comes Next
As of now, it’s hard to speculate as to what exactly will be next for Bed Bath & Beyond. But it’s highly unlikely it will be positive. The company has discussed the possibility of a reverse stock split, something that often signals distress to investors. Investors had plenty of reason to avoid BBBY stock before Fortune revealed this new economic headwind that threatens its growth prospects even more.
Now it stands to lose one of the few markets it had left. The reasons to walk away from this troubled meme stock are increasing steadily, and that should worry everyone.
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.
