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Bed Bath & Beyond announces reverse stock split plan, shares drop

Published 03/17/2023, 06:15 PM
Updated 03/17/2023, 06:21 PM
© Reuters. FILE PHOTO: A customer walks into a Bed Bath & Beyond store in Novi, Michigan, U.S., January 29, 2021. REUTERS/Emily Elconin

(Reuters) - Bed Bath & Beyond (NASDAQ:BBBY) said on Friday it was seeking shareholder approval for a reverse stock split, sending the struggling retailer's shares 13% lower in extended trading.

The company plans to hold a special meeting on March 27 to determine the split at a ratio in the range of 1-for-5 to 1-for-10, with the final ratio to be decided by the board.

The news comes less than two weeks after it was announced that the stock would be removed from the small-cap S&P 600 index, following a near 60% plunge this year as the retailer fights to stave off bankruptcy.

"The board believes that the reverse stock split will likely result in a higher per-share trading price, which is intended to generate greater investor interest in the company," Bed Bath & Beyond said in a regulatory filing.

CEO Sue Gove said the move would enable the company to continue rebuilding liquidity to execute its turnaround plans and better position it financially.

© Reuters. FILE PHOTO: A customer walks into a Bed Bath & Beyond store in Novi, Michigan, U.S., January 29, 2021. REUTERS/Emily Elconin

In February, the company said it was planning to raise some $1 billion through an offering of preferred stock and warrants. So far, it has raised $360 million out of the planned total.

Bed Bath & Beyond shot to popularity in the 1990s as a go-to shopping destination for couples making wedding registries and planning for new babies, but it has seen demand dwindle as its merchandising strategy to sell more store-branded products flopped.

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