Bed Bath & Beyond (BBBY) recently issued a warning that it may file for bankruptcy following poor sales performance. The company is considering various strategic alternatives, including restructuring, debt refinancing, additional debt, delaying business activities, and selling assets to revive its business.
If BBBY files for bankruptcy, shareholders need to be aware that there are two types of bankruptcy: Chapter 11 and Chapter 7. Under Chapter 11, the company provides a plan to reorganize its business, while Chapter 7 bankruptcies are filed by companies that have no way out and cannot continue their business operations. If a company files for Chapter 11 bankruptcy, day-to-day operations will continue to run, but major corporate decisions will have to be approved by the bankruptcy court. The company’s stock and bonds will continue to trade on the market. Shareholders have the last claim during bankruptcy and may not receive anything if secured and unsecured creditors are not fully paid.
In the event of a liquidation, secured creditors are paid first, followed by unsecured creditors, and shareholders have the last claim. Shareholders may not receive anything if secured and unsecured creditors are not fully paid. Even if a company is successful in reorganizing its business, the ownership structure of the reorganized company will be different. The company’s plan of reorganization will cancel the existing equity shares, and shareholders may face substantial dilution.
Bed Bath & Beyond has fallen short of keeping up with changing retail trends and took a hit when it closed stores during the Covid pandemic. It has been trying to forge a way forward, but none of its turnaround strategies have hit the sweet spot. Experts suggest conducting due diligence by reading the latest news, conducting technical and fundamental analyses, and studying a wide range of commentary before making any trading decisions. Remember, your decision to trade should depend on your attitude to risk, your expertise in the market, the spread of your portfolio, and how comfortable you feel about losing money.
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FAQs
Shareholders who are being wiped out include those who helped Bed Bath & Beyond raise more than $400 million earlier this year through equity offerings when the company was insolvent.
What will happen to my BBBY shares? ›
New York – Legacy Bed Bath & Beyond's BBBY shares are set to be “canceled, released, and extinguished” within a matter of hours. Per a filing with the bankruptcy court, the final curtain will come down on Sept. 30.
Did Bed Bath and Beyond just file their bankruptcy plan which wipes out shareholders? ›
The shareholders who had attempted to capitalize on Bed Bath & Beyond's meme stock status were wiped out when the court-approved bankruptcy plan went into effect at the end of September. The bankruptcy court has ordered the proceeds from the liquidation of the company's assets be used to pay back the company's debtors.
Will BBBYQ be delisted? ›
The execution of the plan resulted in the nullification and worthlessness of BBBYQ shares, which were delisted from the over-the-counter (OTC) market on October 2.
Can you still buy Bed Bath and Beyond stock? ›
After declaring bankruptcy in April 2023, the home furnishing retailer was delisted from the Nasdaq and began to trade via an over-the-counter (OTC) exchange. That's often an early nail in a company's coffin, and in the case of Bed Bath & Beyond, it proved no different. Now, BBBYQ stock no longer exists.
What happens to my shares if a stock is delisted? ›
If an investor owns a stock, but that stock gets delisted, they still own the stock, but its value is likely to decline significantly. Mandatory delisting is usually viewed as a sign of financial distress and can sometimes signal a forthcoming bankruptcy, which tends to decimate a stock's value.
Are bed, bath, and beyond shares worthless? ›
In a filing Friday, Bed Bath & Beyond BBBYQ said that its shares are canceled, and “have no value” as the company's bankruptcy plan takes effect. Bed Bath & Beyond also said that it is undergoing “an orderly wind-down and liquidation process.”
How high will BBBY stock go? ›
The average 12-month price target from 13 analysts that have issued a Bed, Bath & Beyond stock forecast is $5.13 per share in 12 months time, according to MarketBeat.
What price does a stock have to be to be delisted? ›
Several events can put a company at risk of being delisted. These include, failing to meet a minimum closing bid price of at least $1.00 for 30 consecutive trading days, failing to maintain a specific market cap, or failing to meet myriad requirements related to trading volume, shareholders' equity, or revenue outputs.
How do you sell delisted? ›
The corporation must honour the delisting price. If the firm has been delisted for more than a year, the shareholder might approach the company and negotiate a private sale of the shares to the promoters. This will be an off-market transaction, with the price agreed upon by the seller and buyer.
The largest shareholder of Bed Bath & Beyond is Davis Selected Advisers LP, according to MarketScreener. This investment company reportedly owns 14.81 million shares in the retailer, resulting in an 18.4% stake.
What is the price of BBBY stock today? ›
The current price of BBBY is 0.0751 USD — it has decreased by 27.09% in the past 24 hours.
Where to trade bed bath and beyond stock? ›
The best brokers for buying Bed Bath & Beyond shares
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With regard to the original BBBYQ stock (with the Q specifying it's now in bankruptcy proceedings), Pachter noted that the company's debt exceeded its assets even after Overstock paid in $21 million. “BBBY shareholders are likely to be left with worthless stock.
What happens to my stock shares after a merger? ›
In such a case, if the acquiring company distributes cash for those shares, you will receive the said amount, and the acquired company's shares will disappear. If the acquiring company distributes shares of their company, the shares as per the deal will be credited to your account.
What will happen to bed, bath, and beyond? ›
Bed Bath & Beyond's stores have officially shuttered but customers can still shop the brand through its relaunched website and app. Overstock acquired Bed Bath's intellectual property and ditched its own name in a bid to boost sales, acquire new customers and cement itself as a go-to home goods retailer.
