Bed Bath & Beyond’s (BBBY) stock sank 24% after the embattled retailer announced it will raise as much as $1.025 billion through an equity offering.
BBBY had gained 92% on Monday ahead of the announcement, as a recent rally in the nearly-bankrupt company continued to gain momentum. The stock soared as much as 120% during the trading session.
Shares of the retailer are heavily shorted, with short interest standing at about 53% of the float, according to data compiled by S3 Partners.
Bed Bath & Beyond has been trying to conserve cash as it teeters on the edge of bankruptcy after accruing more than $1 billion in debt and losses by the end of 2022.
The company warned in a recent regulatory filing it was hit with a default notice from JPMorgan and does not have adequate funds to repay its loans.
Meme stocks overall have rallied over the past month as some of the trades reminiscent of the “meme craze” of 2021 have regained popularity so far this year.
GameStop (GME) is up 29% year-to-date and AMC (AMC) shares have gained 68% since the start of 2023. On Monday, AMC was briefly halted for volatility as the stock climbed as much as 19%. Shares closed 11% higher on Monday.
Bed Bath & Beyond stock hit a 52-week low of $1.27 on Jan. 6th, with shares more than quadrupling since.
Investors have taken a risk-on approach over the past month, with AI-related equites joining beaten up tech names as the biggest winners in addition to meme names from yesteryear.
Artificial intelligence maker C3.ai (AI) was up 6% on Monday, while smaller-cap, lesser-known names like BigBear.ai (BBAI) soared 18%, and voice AI company SoundHound (SOUN) spiked 42%.