Bed Bath & Beyond Stock Price Struggles Following Dilution

After dropping by more than 7 per cent in Monday’s trading session, the Bed Bath & Beyond share price went up by 2 per cent yesterday’s trading session. The rise in the markets also stopped a streak of a five-day bearish trend that had seen the company’s value dropping by over 20 per cent. 

Bed Bath & Beyond Share Price History

The current aggressive bearish trend has been in the making for the past few months. For instance, the company’s year-to-date value has dropped by 80 per cent. In the past month, it has lost over 25 per cent of its value, with a possible continuation of the bearish trend in the next few trading sessions. 

This week, the company’s value dropped by over 7 per cent on Monday after reports came out that it was planning to offer share options to its lender. The reports indicated the Bed Bath & Beyond company had already settled over $30 million last week and was planning to wipe out the remaining $123 million using an equity swap scheme. 

Most shareholders have viewed the recent move by the company as positive and are hoping that addressing the debt problem will help lift the company up again. The decision follows a standoff between the company and its suppliers last month, which escalated to the point where some of these suppliers refused to continue doing business with the company despite it having received over $500 million in new funding.

With most suppliers concerned about the company’s future and its current financial health, some have requested the company to change its policy to an upfront payment, a decision the company has refused to implement. 

Therefore, looking at the company’s current financial situation, the recent problems with its suppliers, and the stock dilution, it is likely we might continue to see the Bed Bath & Beyond share price drop for the next few trading sessions. I expect the company to trade below the $2.5 price level within the next few trading sessions. However, recovery and trade above $3.5 price level will invalidate my bearish analysis.

Daily Chart