Bed Bath & Beyond Inc. said it will try to sell up to $300 million of common stock in the open market while terminating a fundraising deal with hedge fund Hudson Bay Capital Management LP in the latest effort by the troubled home-goods retailer to stave off bankruptcy, WSJ Pro Bankruptcy reported. The Union, N.J.-based company broke off its equity-raising deal with Hudson Bay after reporting another sharp drop in sales in the most recent quarter. Bed Bath & Beyond also said that if its public offering fails to come through, the company expects to file for bankruptcy protection, likely wiping out holders of its common stock. Shares slumped 26% Thursday to hit an all-time low of 59 cents. The company now has a market capitalization of roughly $70 million. The new low caps a stark reversal from August when a burst of bullish interest from retail investors pushed the stock over $23, reminiscent of the dizzying rallies of other meme stocks like AMC Entertainment Holdings Inc. and GameStop Corp. The company’s hopes of avoiding chapter 11 ride on selling more shares to keep itself afloat as its sales erode and it closes hundreds of stores. New financing is crucial for the company to stock up inventory and pay down debt as it tries to turn around its business, which has deteriorated since consumers reacted poorly to a strategy shift away from brand-name products.
