Bed Bath Beyond on the brink of bankruptcy?

The company's shares are starting the new week in a depressed mood. All because of the escalating specter of bankruptcy for the company, which is begging for an injection of additional capital for the possibility of maintaining its operating capacity. Offers are not coming in, however, due to concerns about the profitability of doing so. Two months ago, the company received $360 million in emergency financing from a hedge fund. 

Nevertheless, this is not enough, and the company is now trying hard to negotiate another $300 million in financing. Offers are few, however, and the funds are taking a negative view of the recent stock dilution. Another negative factor is the exodus of retail investors, who have eagerly sold shares over the past 2-weeks.  Let's remember that not so long ago, the company's shares were posting huge gains, fueled by a wave of speculation centered on the Wall Street Bets movement.

By April 26, the company must assess and demonstrate that it is still capable of maintaining safe issuer status.  Eligibility requirements include maintaining a capitalization of at least $700 million over the past 60 days. At this point, it is close to $200 million.  Bed Bath & Beyond (BBBY.US), which it hinted on Thursday, would not meet these conditions by April 26 and therefore would not be able to issue securities under the agreement.

Shares of Bed Bath & Beyond (BBBY.US), M1 interval. Source: xStation5