The company announced that it is cutting 20% of corporate and supply chain staff and shuttering 150 of the retailer's worst-performing stores. Bed Bath & Beyond also announced that it had secured more than $500 million in new financing after talks with JPMorgan Chase and Sixth Street Partners.
Its stock cratered at open on Wednesday, tumbling more than 23% to $9.25 per share. The drop follows a recent surge powered by meme stock traders that had the price go as high as $23 per share. That rally has since evaporated.The rally began when it was revealed that activist investor Ryan Cohen, the founder of pet supply retailer Chewy, had taken an 11.8% stake in Bed Bath & Beyond, which had been struggling at its locations across the country in recent years.
The call options were a signal that Cohen was betting that the company’s value would rise over the next few months, although the surge, which resulted in the share value increasing by more than 100% in just five days, began to die when a regulatory filing revealed that Cohen planned to sell his stake in the company.
Cohen drew headlines in 2020 when it was disclosed that he had taken a 10% ownership stake in GameStop, becoming its chairman. His stake, and ascension to GameStop’s leadership, led hordes of minor investors on the internet forum WallStreetBets to drive up GameStop’s stock.
Last week brought more bad news for Bed Bath & Beyond. S&P Global Rating dropped the company’s credit rating further into junk territory, citing “mounting challenges, including very poor sales performance, deteriorating liquidity, and looming maturities.”
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