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Will Bed Bath & Beyond’s meme stock move transform its fortunes?

February 8, 2023Written by George Anderson

Photo: Getty Images/felixmizioznikov

Bed Bath & Beyond is saved, at least for the time being. The retailer, which has been on Chapter 11 bankruptcy watch for months, yesterday issued a press release announcing a deal with Hudson Bay Capital Management (HBCM) that will provide funds for a public offering of its stock. The New York Times on Monday reported that Bed Bath & Beyond was pursuing a plan to raise up to $1 billion through the sale of convertible preferred stock and by tapping into the company’s $100 million credit line. Bed Bath & Beyond’s hail Mary was answered by HBCM, a $19 billion hedge fund with no relationship to Saks’ owner Hudson’s Bay Co. A Wall Street Journal article posits that HBCM is betting that the recent rise in the volume of Bed Bath & Beyond’s shares will continue as it remains a favorite of meme stock investors. The retailer’s shares were up 2.66 percent in premarket trading after a 2.85 percent decline yesterday. "This transformative transaction will provide runway to execute our turnaround plan,” said Bed Bath & Beyond CEO Sue Gove in a statement. “We continue to put our customers at the center of every decision, positioning Bed Bath & Beyond to meet and exceed their expectations, while resetting our foundation for near- and long-term success. We are optimizing our store fleet and supply chain and continuing to invest in our omni-always capabilities. This will enable us to better serve our customers, and grow profitably, by directing merchandise where and how they want to shop with us. We are also prioritizing availability of leading national and emerging direct-to-consumer brands our customers know and love. As we make important strategic and operational changes, we will continue to take disciplined steps to enhance our cost base and improve our financial position." Bed Bath & Beyond, which has already closed hundreds of stores, plans to reduce the overall count of its namesake brand to 360 locations. It will also continue to operate 120 buybuy BABY stores. The retailer expects online sales to make up a bigger percentage of its total sales. A potential sale of buybuy BABY also remains a possibility.

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