What happened
Thursday was generally a lousy day for stocks but proved to be an outright disaster for the unfortunate holders of Bed Bath & Beyond (BBBY) shares. Following Wednesday's media reports of an impending bankruptcy filing, even worse speculation came down the pike the following trading session. As a result, the troubled-retailer's stock price crumbled by more than 35%.
So what
An odd, brief bull run on Bed Bath & Beyond came to a crashing halt on Thursday. Previously, contrarian investors had traded the stock up after a Bloomberg report the previous day about the bankruptcy filing.
After market hours that day, The Wall Street Journal published its own update on the matter, adding that the retailer is preparing such a filing for submittal as early as this weekend. The financial newspaper cited unidentified "people familiar with the matter" as saying that its withered share price makes it prohibitively difficult to raise sufficient funding to avoid a default situation.
Bed Bath & Beyond had launched an effort to raise $300 million in equity funding by next Wednesday, April 26 -- the date on which it's obligated to file its 10-K annual report with the Securities and Exchange Commission (SEC). According to the WSJ, as of April 10, the company had scared up only $48.5 million.
Now what
Bed Bath & Beyond is becoming one of the poster boys for the retail apocalypse that continues to claim victims. At this point, there seems to be little way forward for the company as a functioning entity. No wonder investors are quickly abandoning this sinking ship.
