Shares of Bed Bath & Beyond fell more than 30% early Tuesday.
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Wedbush lowered its price target on
Bed Bath & Beyond
to $0, saying the struggling retailer’s planned equity offering was a “last gasp” before filing for bankruptcy protection.
The equity offering, announced Monday, plans to raise more than $1 billion to repay debt. The company (ticker: BBBY) is also appointing Holly Etlin as interim chief financial officer. These two initiatives are intended to lift the retailer from its recent downward spiral, which was precipitated by competition from other retailers such as
Amazon.com
(AMZN), and a potential delisting from the Nasdaq stock exchange, among other challenges. If the equity offering is successful, an amended agreement would mean creditors will waive outstanding debts.
Wedbush analyst Seth Basham isn’t optimistic. Closing more stores “could help stem the bleeding,” he wrote in a research note Tuesday. But he argued there are still questions around the retailer’s path forward.
“Moreover, the weak macro backdrop and high execution risk of BBBY’s inventory, assortment, customer re-engagement, and cost-savings initiatives under an interim new management team…further reduces the probability of success,” he added.
Basham rates the stock Underperform.
At the time of publication, representatives for
Bed Bath & Beyond
hadn’t responded to requests for comment.
Shares of Bed Bath & Beyond fell more than 30% early Tuesday to $4.02. Over the past 12 months, the stock has fallen about 65%.
Write to Emily Dattilo at emily.dattilo@dowjones.com
Credit: marketwatch.com