Bed Bath & Beyond (NASDAQ:BBBY) stock gained over 65% in the last five trading days. The wild ride continued on Wednesday, with shares of this domestic merchandise retail operator closing 35.3% higher. Despite this surprise rally, BBBY is heading towards bankruptcy as its efforts to raise capital bore no fruit.
Per a Wall Street Journal report, Bed Bath & Beyond is preparing to file for protection under Chapter 11 of the U.S. Bankruptcy Code as early as this weekend.
BBBY initiated a turnaround plan and raised $360 million in an equity offering to avoid defaulting on its credit agreement. However, the company needs to raise additional funds to survive, the chances of which are low.
What is the Future of BBBY?
Unsurprisingly, the company’s failure to raise additional funds (about $300 million by April 26) through the stock sale will lead it to bankruptcy, as highlighted in the WSJ report. Chances of its revival look bleak given the slump in business and decline in share price. BBBY stock could stay highly volatile in the upcoming trading sessions.