Bed Bath & Beyond fell 50% in February – its second-worst result in a month – as meme shares teeter on the brink of bankruptcy.

  • Shares of Bed Bath & Beyond fell 50% in February as the home improvement company struggles to stave off bankruptcy.
  • The steep loss marks the company’s second-worst monthly performance on record.
  • For example, GameStop and AMC, Bed Bath & Beyond was popularized as a collection of memes.

Shares in Bed Bath & Beyond fell 50% in February as the retailer struggled to stave off bankruptcy.

Shares of memes closed in February at $1.41 after falling 4.73% on Tuesday. The sharp drop in February marks Bed Bath & Beyond’s second-biggest monthly drop in history – the only time it fell more in a single month was a record 61% drop in March 2020.

The home improvement retailer’s shares took a hit last year as it struggled with mounting debt and a shortage of inventory.

The company missed interest payments on about $1 billion in bonds last month and announced plans to close 141 more stores. Earlier last month, Wedbush Securities released a grim price target for the company’s stock, forecasting its shares to be worth $0.

In a last-ditch effort to avoid bankruptcy, the company secured commitments from investors to raise more than $1 billion in capital. According to the statement, the firm plans to issue convertible preferred securities and warrants. He said he would immediately receive $225 million through the sale in a deal that would eventually be worth more than $1 billion, according to the Wall Street Journal.

Convertible preferred shares are a type of securities issued by companies that give an investor the right to convert their preferred shares into common shares at a discount to the market price.

But legendary investor Michael Berry noted the risks to a last-minute funding deal, giving serious warning to fans of meme stocks. “It’s time for the memesters to see what a death spiral convertible is,” he said in now deleted tweet.

Meanwhile, Bed Bath & Beyond is also raising $100 million from a line of credit to pay off outstanding debt.

“The clock is ticking for Bed Bath & Beyond to raise some money, but getting the money will only reset the clock. Bed Bath & Beyond will have to submit its recovery plan – and quickly – if it raises the money. How long will it take. will come down to how much it can stop money burnout and improve sales,” said Joshua Warner, market analyst at City Index.

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