Bed Bath & Beyond (NASDAQ:BBBY) stock dropped 10% in premarket trading to about $3.44 per share after traders learned it failed to file its results for the November quarter with the Securities and Exchange Commission (SEC). Failure to file the 10-Q report on time means BBBY stock is with Nasdaq regulations.
It’s just the latest embarrassing twist in the home goods retailer’s saga as interim CEO Sue Gove tries to stave off bankruptcy.
What’s Wrong Now?
Bed Bath & Beyond in an 8-K filing, admitting to the threat of delisting and saying it “plans to file its Quarterly Report as promptly as possible to regain compliance with the Listing Rule.”
BBBY gave what now seem to be to traders and the press on Jan. 10. They showed a loss of $393 million, or $4.33 per share, on revenue of $1.26 billion.
On Stocktwits, opinions were . One trader estimated BBBY will have by February while facing a cash burn rate of $139 million per month. Others continued to hope will lead to a profit.
The most likely conclusion is either Sycamore Partners or Authentic Brands will buy BBBY out of bankruptcy, with Sycamore looking to cut costs at the stores and Authentic seeking to
. A release from its seemed to echo language used by Sycamore.
Discussions at Reddit’s r/WallStreetBets are likely to be halted, as the market capitalization has been under $500 million for several days. Moderators have been . Most interest seems to lie in the stock’s options, with prices the stock price goes lower.
What Happens Now for BBBY Stock?
The eventual failure of Bed Bath & Beyond was clear once the market learned Authentic and Sycamore were prime bidders for the company. Both specialize in getting value from distressed assets, often out of bankruptcy. Common stockholders have no priority in a bankruptcy and usually get nothing.
On Penny Stocks and Low-Volume Stocks: With only the rarest exceptions, InvestorPlace does not publish commentary about companies that have a market cap of less than $100 million or trade less than 100,000 shares each day. That’s because these “penny stocks” are frequently the playground for scam artists and market manipulators. If we ever do publish commentary on a low-volume stock that may be affected by our commentary, we demand that InvestorPlace.com’s writers disclose this fact and warn readers of the risks.
Read More: Penny Stocks — How to Profit Without Getting Scammed
On the date of publication, Dana Blankenhorn did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
