Another day, another report warning that a
Bed Bath & Beyond
bankruptcy filing could be imminent. Shares of the beleaguered retailer are falling.
Bed Bath & Beyond stock has fallen 7% to $2.67 cents at 10:27 on Tuesday, as the shares continue to swing to the will-they or won’t-they beat. Today’s piece of news—a Reuters report that the company could seek bankruptcy protection as soon as this week—appears to be the culprit, or it may just be some giveback following Monday’s 13% gain.
Bankruptcy, though, is the likely outcome. The Wall Street Journal reported on Monday that Bed Bath has to pay the interest on its debt on Feb. 1, something that doesn’t automatically trigger a bankruptcy filing, but will get bondholders talking about what comes next. The Journal also reported that Bed Bath has to fund payrolls at the end of the week.
Bed Bath did not return requests for comment on the latest report.
If a bankruptcy filing does come, it wouldn’t be a shock. Barron’s noted back in 2019 that previous management’s missteps had put the company in a precarious position. Its issues attracted several activists to get involved with the stock, which led to much-needed leadership changes, but even those moves combined with a pandemic that led to widespread nesting, and Bed Bath’s brief embrace by meme traders hasn’t been enough to stop its slide.
Barron’s also reported on how skittish credit markets were feeling about Bed Bath’s debt back in June, and the company has already triggered “certain events of default” earlier this month. he company has been hit with a delisting warning from Nasdaq, announced it’s shuttering more stores, and reported a downbeat fiscal third quarter. Monday’s Reuters report was far from the first use of the B-word, as Bloomberg reported that Bed Bath was in bankruptcy talks with lenders nearly three weeks ago after the company itself warned it was a possibility.
But look no further than the bond market for how investors really feel. Bed Bath & Beyond’s debt due in August 2024 trades at just $4.50, according to FactSet data, while its bonds due in August 2034 trade at $5.54, when par would be around $100.
All of that is to say that when it comes to the waiting game with Bed Bath, time may running out.
Write to Teresa Rivas at firstname.lastname@example.org