Bed Bath and Bankrupt – BBBY’s Bankruptcy
At last, Bed Bath and Beyond has fallen. On Sunday, the retail business filed for Chapter 11 bankruptcy in what was the final nail in the coffin as we could all see this coming. For months, they have been warning about possible bankruptcy while actively trying to escape it, receiving a $375 million loan back in August and attempting to raise $300 million from investors just this month. After closing hundreds of stores to cut losses, the company plans to close the rest of its 360 locations during the liquidation process, and it marks another fatality in the retail industry following the bankruptcy of JCPenney and Toys ’R’ Us. One of the main reasons attributed to the bankruptcy was Bed Bath and Beyond’s failure to enter the e-commerce space sooner, with Amazon and other online retailers quickly eating away at the business and making them unprofitable for the first time in 2019.
Sadly, this also marks one of the fallen meme stocks as Bed Bath and Beyond was a favorite of online forums like Wall Street Bets. Retail investors oftentimes kept the company afloat by taking advantage of the high short interest from Wall Street institutions, sending shares up by as much as 10 times their value at times during the meme stock fiasco. There have been times where meme stocks often get a lifeline from retail investors, but this was too much to overcome. As it’s a Chapter 11 bankruptcy, there is still a chance for Bed Bath and Beyond to have a happy ending if they can find a buyer during the restructuring process, allowing them to pursue that instead of liquidation. Otherwise, it’ll be a sad goodbye for what was one of America’s most loved retail brands.
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I am not a financial advisor and my comments should never be taken as financial advice. Investments come with risk, so always do your research and analysis beforehand.