Bed Bath & Beyond prepares for a potential bankruptcy filing, shares react

By Davit Kirakosyan

Bed Bath & Beyond (NASDAQ:) shares closed more than 35% higher today, while currently trading 29% lower after-hours following Bloomberg’s report in the morning, according to which the company is preparing for a potential bankruptcy filing as its recent attempts to raise funds have fallen short.

According to the people familiar with the matter, the company is in talks with advisers and lenders regarding a Chapter 11 filing that could occur in the coming weeks. To finance itself during bankruptcy, the retailer is exploring financing options. The company had aimed to secure $300 million from equity investors by April 26, but the deadline may be missed.

The company has previously managed to avoid bankruptcy this year by raising $360M from a hedge fund investor that bought shares at a discount, but the deal diluted existing shareholders and caused the stock to plummet.