Bed Bath & Beyond Inc, a US household goods retailer that has finally filed for bankruptcy due to financial difficulties, crashed in the New York market on Monday.
Bed Bath & Beyond, which has a 52-year history, filed for Chapter 11 bankruptcy protection on Sunday (local time) and commenced the liquidation sale of some or all of its assets. This company, which attracted attention as a ‘meme stock’ on Wall Street, has warned of the possibility of bankruptcy due to financial difficulties for several months.
Shares in Bed Bath & Beyond (NASDAQ:BBBY) closed at 19 cents, down 35.67% on Monday. It then traded at 20 cents, up 5.4% in after-hours trading.
On Monday Bed Baths & Beyond was the second most active stock on Stocktwits, a website popular among individual investors. Also known as a flagship meme stock, the company rose to $36.87 per share in 2021.
Losses were due to ill-judged market strategy, reduced spending by inflation-stricken Americans, and tougher competition from TJX (NYSE:TJX) to rivals such as TJ Maxx and Target Corp (NYSE:TGT). As the money grew and cash ran out, the business went bankrupt.
But the company’s demise poses no threat to the broader retail sector, and some companies including Walmart (NYSE:WMT), Amazon.com (NASDAQ:AMZN), Target and Williams-Sonoma (NYSE:WSM) will benefit, analysts said.
Bed Bath & Beyond, meanwhile, has also named Holly Etlin as interim CFO. A bankruptcy specialist, Etlin will also serve as the chief restructuring officer, overseeing the liquidation and divestment process.