Bed Bath & Beyond Stock Continues to Trade at High Volumes Despite Bankruptcy
Shares of Bed Bath & Beyond are still being heavily traded, even though the popular meme stock is on the verge of being declared worthless. On August 16th, more than 15 million transactions took place in the company’s shares. Bed Bath & Beyond filed for Chapter 11 bankruptcy in April and has been closing its physical stores in recent months. The company’s intellectual property was acquired by Overstock, who relaunched the business as an online-only retailer. The company’s original stock ticker will also be changed to BBBY in an attempt to capitalize on its well-known brand. However, the company’s bankruptcy filing warns that trading its stock is highly speculative and could result in significant or complete loss for investors.
No Recovery Expected for Common Shareholders in Bed Bath & Beyond Bankruptcy
According to the company’s bankruptcy plan, common shareholders of Bed Bath & Beyond will not receive any recovery or distribution under the plan. This means that the company’s market cap of $152.25 million essentially amounts to nothing for common shareholders. Bondholders will receive priority in the reimbursement process, while common shareholders have no voting rights on the plan. The company’s confirmation hearing for the bankruptcy plan is scheduled for September 12th, but there have been no positive developments to support the recent surge in share purchases.
Speculation and Empty Hopes Surround Bed Bath & Beyond Stock
Investors trading in Bed Bath & Beyond’s stock may be engaging in futile speculation. The company’s stock has declined by over 91% since the beginning of the year and closed at $0.21 per share on Wednesday. The cancellation of the common stock has yet to be confirmed, but it appears that retail traders will likely lose their investments. Some analysts criticize the unregulated nature of meme stock trading and liken it to destructive behaviors such as drug use and gambling.
Overstock Faces Decline, But Bed Bath & Beyond Rebrand Shows Promise
Overstock, which acquired Bed Bath & Beyond’s intellectual property, has also experienced a decline in its stock. However, the rebranding of Bed Bath & Beyond seems to be working, as the company’s app has seen increased downloads since the relaunch. This indicates that the brand recognition of Bed Bath & Beyond is resonating with customers. Analysts suggest that Overstock shares may be oversold and that the company’s shares could see growth in the future. On the other hand, Bed Bath & Beyond shareholders are likely to be left with worthless stock due to the company’s high debt and limited assets.
