Shares of Bed Bath & Beyond ( BBBY ) fell 45% Tuesday morning after the struggling retailer announced plans to raise up to $1.025 billion through a stock offering.
BBBY surged 92% ahead of the announcement, which came after the market closed on Monday, as a recent rally in the near-bankrupt company gained more momentum.
The retailer’s shares are very short, with short interest at about 53% of the free float, according to data compiled by S3 Partners.
Bed Bath & Beyond has been trying to save cash as it teeters on the brink of bankruptcy after racking up more than $1 billion in debt and losses through the end of 2022.
The company warned in a recent regulatory filing that it was hit by a reminder from JPMorgan and does not have enough funds to pay off its loans.
Meme stocks have risen broadly over the past month as some of the trades reminiscent of the 2021 “meme craze” have regained popularity so far this year.
GameStop ( GME ) is up 29% year to date and shares of AMC ( AMC ) are up 68% since the start of 2023. On Monday, AMC was briefly halted on volatility as the stock rose as much as 19%. Shares closed 11% higher on Monday.
Shares of Bed Bath & Beyond hit a 52-week low of $1.27 on Jan. 6, and shares have more than quadrupled since then.
Investors have taken a risk-on approach over the past month, with AI-related stocks appearing alongside struggling tech names as the biggest winners alongside yesterday’s meme names.
Artificial intelligence maker C3.ai ( AI ) rose 6% on Monday, while smaller, lesser-known names like BigBear.ai ( BBAI ) rose 18% and AI company speech SoundHound (SOUN) increased by 42%.
Ines is a Senior Business Reporter for Yahoo Finance. Follow her on Twitter at @ines_ferre
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