However, the retailer is still standing after what must have been a grim holiday season.īed Bath has only a one in 10 chance of survival. Lack of payment cut inventory availability for the holiday season. It then told long-suffering suppliers it could pay them. Instead, it got a $1 billion aid package anchored by preferred stock. Investors watching the stock will see how online memes can impact the market and what it looks like when a large brand ultimately fails.ĭownload Q.ai today for access to AI-powered investment strategies.Bed Bath & Beyond was supposed to go bankrupt. Given recent news, it looks increasingly likely that the company will fail sooner rather than later. The bottom lineīed Bath & Beyond opened 2023 by warning investors that it might go bankrupt. With Investment Kits and Portfolio Protection, investing can be easy and fun. Its artificial intelligence can help you invest toward any goal and is designed to succeed in any market. If you want help, consider working with Q.ai. Given the stock market’s apparent lack of rationality, figuring out the best way to invest can be difficult. Investing based on trends is possible, but it’s also essential to do due diligence and look at the underlying business, lest you buy into a company poised to fail. The fact that the market can be irrational and react unexpectedly is vital for investors to learn. Even hugely negative news of missed bond payments, which herald an impending bankruptcy, caused the stock price to rise. Despite a constantly worsening financial situation, the company’s stock has seen massive price spikes. For one, it’s a great illustration of the concept of meme stocks. Why it’s important for investorsīed Bath & Beyond’s story is important for investors to understand. It can also show that in-person retail may not be as successful as hoped in a post-pandemic world, driving businesses to look for other revenue sources. It also had to turn to debt after the pandemic receded as post-COVID shoppers failed to appear in its stores.Ĭompetitors can view Bed Bath & Beyond as a cautionary tale, showing how even successful businesses can stumble and ultimately fail. However, it saw the writing on the wall and took on significant debt to improve its online shopping experience. The company peaked in 2013 with a value of $17 billion, well into Amazon’s rise as one of the top retailers in the world. What it means for the competitionįor a long time, Bed Bath & Beyond managed to fight against changing consumer trends, resisting the rise of online retail. With the announcement of the missed interest payments, a spokesperson for the company shared that the company could enter bankruptcy within weeks. The company closed roughly 150 stores in August of 2022 and announced further closures this year. Though the company has a 30-day grace period to make good on its interest payments, the odds are relatively low. The stock opened the next day at $3.41 and closed at $3.33. The latest price spike came in early January as online investors helped push the company’s price from $1.31 per share to $5.24, an increase of about 300%.įollowing the trend of meme stock prices diverging from the apparent reality of the company’s performance, the stock moved from $2.74 at opening on the morning of February 1, 2023, to a high of $2.95 before settling at $2.82 by the day’s end despite the company’s announcement of missed bond payments. This interest caused share prices to spike a few times between 2020 and today despite the overall downward movement. The company has battled constantly falling revenue and profits, making it easy to see why shares have fallen.ĭespite this poor performance, Bed Bath & Beyond gained the attention of online investing communities that invest in meme stocks. Though the company’s share price rebounded after a drop during the COVID-19 pandemic, it has been trending downward since mid-2021. What’s happening with Bed Bath & Beyond?īed Bath & Beyond has struggled recently. A coordinated short squeeze occurred in January 2021, increasing the company’s valuation by around 30X. When the company became a meme stock and began to rise in value, the short squeeze catapulted its shares from $17.25 to more than $500 per share during pre-market trading. This is what happened with GameStop, one of the best-known meme stocks. This can lead to massive increases in stock prices. Those with short positions (those who are betting the stock will lose value) may panic and buy shares to reduce their risk, pushing higher prices. A short squeeze occurs when the price of a heavily shorted stock starts to rise.
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |