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
Bed Bath & Beyond shares were eliminated Friday after the company's bankruptcy plan went into effect, marking the end of a speculative frenzy that drew retail investors who defied repeated warnings that the stock would become worthless.
What does bed bath and beyond bankruptcy mean for shareholders? ›
Bankrupt Bed Bath & Beyond filed their Ch. 11 plan on July 20, just before midnight. Shareholders get no recovery and shares will be cancelled. Unsecured noteholders could, in theory, get a recovery from a liquidating trust that is being created. The retailer is being completely liquidated.
Who are the major shareholders of Bed Bath and Beyond? ›
Largest shareholders include Brown Brothers Harriman & Co, Goldman Sachs Group Inc, Credit Suisse Ag/, Norges Bank, PGGM Investments, Champlain Investment Partners, LLC, Goldman Sachs Group Inc, California State Teachers Retirement System, Retirement Systems of Alabama, and Goldman Sachs Group Inc .
Why can't I 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 to do with bed bath and beyond shares? ›
It's the end of the road for shares of bankrupt home goods retailer and sometime meme-stock darling Bed Bath & Beyond Inc. 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.
What happens to my shares if a stock is delisted? ›
Investors holding shares after a delisting will only be able to sell them OTC. That generally means less liquidity, finding it harder to locate buyers at the price you want, and potentially being left in the dark about what the company is up to. Nasdaq. “Listing Center.”
Do shareholders get wiped out in bankruptcy? ›
In Chapter 7 bankruptcy, a company is simply going out of business. It sells its assets to pay off debts. Shareholders are left to split what's left, if there is anything remaining at all. If there is not, shareholders can get nothing.
How high will BBBY stock go? ›
The forecasts range from a low of $0.71 to a high of $4.20. A stock's price target is the price at which analysts consider it fairly valued with respect to its projected earnings and historical earnings.
Do shareholders get paid back if a company declares bankruptcy? ›
While it's theoretically possible that you get some money back, it's highly unlikely. The SEC says that "Stockholders do not have to be notified of the Chapter 7 case because they generally don't receive anything in return for their investment."
Does Ryan Cohen still own BBBY shares? ›
Finally, after the close, the question that the street had been arguing about for over 24 hours was answered: Ryan Cohen had sold his BBBY position. The Form 8-K filed showed the question with a resounding YES, Cohen and RC Ventures had sold everything, stocks, and options.
The billionaire activist investor Ryan Cohen won the dismissal on Tuesday of a shareholder lawsuit accusing him of profitably cashing out of Bed Bath & Beyond shares too quickly as the home goods retailer was hurtling toward bankruptcy.
Who owns the most Bed Bath and Beyond? ›
Overstock (OSTK), which sells furniture, home furnishings, bath, lighting, rugs and an array of other products online at discounted prices, acquired Bed Bath & Beyond's name, intellectual property and digital assets in June with a winning bid of $21.5 million for its assets.
What will happen to Bed Bath and Beyond shareholders? ›
Bed Bath & Beyond (BBBYQ) has filed for Chapter 11 bankruptcy and confirmed that shareholders will not receive any returns on their positions as part of the company's restructuring plan.
Will BBBY stock come back? ›
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. Bed Bath & Beyond's stock will cease trading and the husk of the company will no longer exist.
Is it good to buy BBBY stock? ›
Bed Bath & Beyond's analyst rating consensus is a Moderate Sell. This is based on the ratings of 2 Wall Streets Analysts.
Will BBBYQ be delisted? ›
The end of the line is quickly approaching for Bed Bath & Beyond (OTCMKTS:BBBYQ) stock. Since it declared bankruptcy and delisted from the Nasdaq in April 2023, the home furnishing retailer has been in a slow, painful race to the bottom.
What happens to bed, bath, and beyond now? ›
Overstock brought the brands together this summer with the $21.5 million purchase of Bed Bath & Beyond's brand assets at a bankruptcy auction. The company made several big moves in quick succession — relaunching Bed Bath & Beyond's e-commerce site, announcing plans to relaunch Overstock, and renaming itself Beyond.
What happens if your share goes down? ›
When the stock market declines, the market value of your stock investment can decline as well. However, because you still own your shares (if you didn't sell them), that value can move back into positive territory when the market changes direction and heads back up. So, you may lose value, but that can be temporary.
