Signage outside a Bed Bath & Beyond store in New York, August 25, 2022.
Gabby Jones | Bloomberg | Getty Images
Shares of Bed Bath & Beyond fell after the retailer turned meme stock said in a filing that it would sell an undisclosed amount of stock.
Shares fell 19% in premarket trading.
“We may offer, issue and sell shares of our common stock from time to time,” the company said in Wednesday’s filing with the SEC. Under the shelf process, the company may sell the securities listed in one or more bids.
“Each time we offer securities, we will provide a prospectus supplement that will contain specific information about the terms of that offering,” the filing said.
The filing also notes that the company plans to use the net proceeds from any sale of securities for “general corporate purposes,” including paying down debt, repurchasing stock or financing potential acquisitions.
Entry change plan
The filing comes just hours before Bed Bath & Beyond is expected to outline a turnaround plan on Wednesday to try to regain the trust of shoppers, investors and suppliers. Some investors had been calling for the retailer to capitalize on its meme status by issuing shares to raise much-needed cash.
The company had previously said it was working with financial advisers and lenders to strengthen its balance sheet. In the most recent quarter, the retailer’s net loss widened, and the company ended May with about $100 million in cash, down from $1.1 billion a year ago.
It may also be in the process of securing a loan: The Wall Street Journal reported last week that the company and asset manager Sixth Street Partners are nearing the final deadlines for a nearly $400 million loan. Sixth Street and Bed Bath did not respond to CNBC’s requests for comment.
Aside from its finances, the company can also address how it plans to attract buyers, fix issues with its supply chain and move inventory. Investors are also waiting for more information on a possible sale or spin-off of its Buybuy Baby brand.
Increase in stocks of memes
Shares of Bed Bath & Beyond rose in August as a global market rally encouraged so-called meme traders to take some risk back on the troubled and heavily shorted retailer. The stock’s move gained momentum throughout the month as small traders talked up the stock on Reddit message boards and hedge funds were forced to hedge their bets against it.
The enthusiasm of the meme traders waned a bit, and the stock hit an all-time high after activist investor Ryan Cohen sold his sizable position in Bed Bath & Beyond. Shares through Tuesday’s close were still up more than 140% this month.
CNBC’s Melissa Repko contributed to the report.
This is a developing story. Check back for updates.