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- Bed Bath & Beyond stock soared on Tuesday despite a downbeat earnings report.
- The home-goods retailer saw deeper quarterly losses than expected, after warning last week of a potential bankruptcy filing.
- The chain also plans to shutter 150 low-performing stores.
Bed Bath & Beyond stock soared as much as 65% early Tuesday despite a downbeat fiscal third-quarter earnings report.
Shares later pared gains sharply but were still up 30%, following a similar advance on Monday.
The home-goods retailer notched a per-share loss of $3.65, worse than the $2.65 loss expected, as sales of $1.26 billion missed views for $1.34 billion. The chain will also close 150 low-performing locations, adding that it’s targeting $80 million to $100 million in further cost savings, which will include layoffs.
The bleak numbers followed up comments last week of a potential bankruptcy filing, and CEO Sue Gove said Tuesday that the company will continue to explore “all strategic alternatives” to restore its financial health. “Multiple paths are being explored and we are determining our next steps thoroughly.”
Bloomberg reported that Bed Bath & Beyond will likely to seek out bankruptcy protection within the first two months of 2023 after the company withdrew a bond-swap offering that had originally been launched in October to ease its debt burden.
On Monday, the meme stock saw a separate 30% surge amid speculation among Reddit users about a potential merger and acquisition deal.
In one post from Thursday that received 1,400 upvotes and nearly 500 comments, Redditor Dan23DJR said a merger was “100% DEFINITELY happening.” He explained how two December S-4 filings and an NT 10-Q document from Bed Bath & Beyond fueled the M&A theory.
In early 2021, Bed Bath & Beyond was right there with GameStop as part of the meme-stock craze that dominated headlines and talks across Reddit’s WallStreetBets page.
Shares had climbed as high as $54 in January 2021. On Tuesday, they hovered around $2.12.