Bed Bath & Beyond’s (BBBY) stock sank 24% after the embattled retailer announced it will raise as much as $1.025 billion through an equity offering.
BBBY had gained 92% during Monday’s trading session ahead of the announcement, as a recent rally in the nearly-bankrupt company continued to gain momentum. The stock soared as much as 120% during the trading session.
Shares of the retailer are heavily shorted, with short interest on BBBY standing at about 53% of the float, according to data compiled by S3 Partners.
Bed Bath & Beyond has been trying to conserve cash as it teeters on the edge of bankruptcy after accruing more than $1 billion in debt and losses by the end of 2022.
The company warned in a recent regulatory filing it was hit with a default notice from JPMorgan and does not have adequate funds to repay its loans.
GameStop (GME) is up 29% year-to-date and AMC (AMC) shares have gained 68% since the start of 2023. On Monday, AMC was briefly halted for volatility as the stock climbed as much as 19%. Shares closed 11% higher on Monday.
Bed Bath & Beyond stock hit a 52-week low of $1.27 on Jan. 6th, with shares more than quadrupling since.
Investors have taken a risk-on approach over the past month, with AI-related equites joining beaten up tech names as the biggest winners in addition to meme names from yesteryear.
Ines is a senior business reporter for Yahoo Finance. Follow her on Twitter at @ines_ferre