By Jeremy C Owens
Delayed quarterly filing shows that loans have been called in after struggling retailer missed payment
Bed Bath & Beyond Inc. shares plunged more than 20% and were halted Thursday afternoon, after the retailer disclosed in a filing that it was in default on loans that have been called in.
The struggling retailer finally filed its quarterly report with the Securities and Exchange Commission on Thursday at roughly 2:30 pm Eastern time, after being threatened with having its stock delisted for being late with the required report. Included in the filing is news that Bed Bath & Beyond (BBBY) had defaulted on loans earlier this month, and executives were informed on Wednesday by banker JP Morgan Chase & Co. (JPM) that the debt was due immediately.
“On or around January 13, 2023, certain events of default were triggered under the Company’s Credit Facilities as a result of the Company’s failure to prepay an overadvance and satisfy a financial covenant, among other things,” the filing reads. “As a result of the continuance of such events of default, on January 25, 2023, the administrative agent under the Amended Credit Agreement notified the Company that (i) the principal amount of all outstanding loans under the Credit Facilities, together with accrued interest thereon, the FILO Applicable Premium and all fees (including, for the avoidance of doubt, any break funding payments) and other obligations of the Company accrued under the Amended Credit Agreement, are due and payable immediately.”
See also: Bed Bath & Beyond bankruptcy warning marks latest chapter in troubled retailer’s downward spiral
Shares had traded between $3.25 and $3.47 on the day until about 5 minutes after the filing was released, when shares suddenly dove, triggering a halt. The stock fell as low as $2.10 and was halted three times between 2:46 pm and 3:14 pm, when they were halted while trading for $2.52, a 22.2% decline on the day.
The struggling retailer admitted earlier this year that it has “substantial doubt” about its “ability to continue as a going concern” and may need to declare bankruptcy. The home goods retailer also said that it expects to record lower sales for the latest quarter than analysts were anticipating.
Bed Bath & Beyond stock has become popular with “meme” traders and short sellers who have been betting on opposite sides of the trade as the retailer reported a poor holiday season and plans to shut down stores. Shares have traded as high as $30.06 and as low as $1.27 in the past 12 months, while declining 81.8% overall in that time. The S&P 500 index has declined 7.7% in the past 12 months.
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-Jeremy C. Owens
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