Shares of Bed Bath & Beyond (BBBY) closed at a record low on Thursday.
The move will consolidate the number of existing shares, thereby increasing the value of each share.
“If the reverse split proposal fails to receive shareholder approval, the company will likely be forced into bankruptcy,” the company said. SEC filing.
A “special meeting” for Bed Bath & Beyond shareholders to vote on the reverse stock split, ranging from 10 to 1 to 20 to 1, is scheduled for Tuesday, May 9, according to filings. The conference followed months of store closures, various searches for new funding rounds for distressed retailers, and most recently, A lifeline to help you pay your vendors.
Bed Bath & Beyond’s stock fell more than 98% last year, ending Thursday’s trading session at an all-time low of $0.31.
Even if the company votes to boost its share price, which has fallen about 98% since last year, there’s no guarantee the retailer will recover. Kate McShane, chief retail analyst at Goldman Sachs, said restocking inventory to revitalize sales growth will be a key focus of funding Bed Bath & Beyond receives.
In its latest quarter, Bed Bath & Beyond reported inventory was down almost 25% year-over-year as revenue fell 33%.
On Thursday, the company announced a vendor commissioning program to ease concerns. The $120 million capital facility will be rolled out to “a major supplier for purchasing babies, complementing inventory levels already sold at Bed Bath & Beyond.” according to the release.
“Having inventory and having good inventory will help them,” McShane told Yahoo Finance Live. , I think we’re in this environment with a little more thoughtful consumers.”
Making Stocks “More Attractive”
Bed Bath & Beyond recently closed an approximately $1 billion financing agreement with the management of Hudson Bay Capital. Part of the financing transaction included a monthly stock purchase from Hudson Bay His Capital, which was made at a market discount.
On March 30, Bed Bath & Beyond announced the closing of the transaction and said it will participate in a new funding program. B. Riley Principal Capital and.
The stock price remains an important source of liquidity for the company, which noted in a recent filing that the higher per-share price from the reverse stock split “helps increase broker interest.” .
“We believe that the current market price of our common stock may affect its acceptability to certain professional investors and other members of the investor community, and therefore we believe that an increase in our stock price may affect a wider range of We believe our common stock could become more attractive to investors,” the company said in a filing.
With Bed Bath & Beyond plagued by failure, the company explained what it means for investors.
“Holders of our common stock will not receive any recovery in a bankruptcy scenario,” the company said.
Josh is a reporter and producer at Yahoo Finance.
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