Revenues collapsed.īed Bath and Beyond has not yet disclosed its revenues for its fourth fiscal quarter, which ends at the end of February. On January 26, in its 10-Q filing with the SEC, it said it had defaulted on its credit line with JPMorgan, and reiterated that it may have to file for bankruptcy. The company has been warning multiple times that it might file for bankruptcy protection, including again today. The buybacks in 20 that incinerated $1 billion in cash that the company now doesn’t have and desperately needs were apparently designed by the ingenious management team, from what I can tell, to speed up the process to bankruptcy.
These are the cumulative share buybacks in dollars that the company incinerated to “return value to shareholders” (data via YCharts): It could have avoided debt and kept enough cash on the balance sheet to just fly through the brick-and-mortar meltdown that has been raging since 2017, and it would have had enough cash to fly through the next economic crisis. It could have used some of the funds to shut down other stores. The company could have invested some of the $11.6 billion in its ecommerce operations and in remodeling its stores. On November 2021, the company bragged that it had incinerated $1 billion in scarce borrowed cash on its latest two-year bout of share buybacks, bringing its total cumulative share buybacks since 2006 to $11.6 billion. At $3.70 in afterhours trading, the shares were down 93% from the January 2021 high (data via YCharts): You can barely see today’s 92% spike and afterhours collapse. The chart below shows the two-year action, the period when BBBY had become a meme stock, with spikes at the close to $52.89 in January 2021.
BED BATH AND BEYOND STOCK PRICES FREE
The era of free money has turned investors’ brains to mush, and this is part of the healing process. It’s socking it to these crazed existing shareholders and given how big of a money-suck it is, it will likely sock it to the new shareholders as well. Obviously, the company is doing what it should do. This whole episode is another reminder that the Fed, the ECB, the Bank of Japan, and all the other money-printer central banks need to remove many trillions of dollars and euros and yen and whatever from the system via QT because there is still a ridiculous amount of money floating around out there, and people are just throwing it around willy-nilly, with all kinds of side effects, including this nuttiness in the markets and the worst bout of inflation in 40 years. But it has a wild stock price, driven by the meme-stock crowd and a huge amount in short interest.
It has all the fundamentals for a meme stock: huge losses, collapsing sales, chaotic management, a ruined business model, and a bankruptcy filing hanging over it. The company also secured a $100 million line of credit from one of its lenders.īed Bath & Beyond has been a meme stock queen for a while.
If the company cannot pull off the offering, it said, it would likely be forced to file for bankruptcy protection.Īccording to sources of the WSJ, the company has secured investor backing for the deal, thereby diluting the bejesus out of the meme-stock jockeys and other existing shareholders.
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