Why Bed Bath & Beyond Stock Is Spiraling Lower

Bed Bath & Beyond Inc BBBY shares are trading lower Monday after the company on Sunday filed for Chapter 11 bankruptcy.

What Happened: Bed Bath & Beyond has been exploring strategic alternatives over the last few months, but the embattled retailer struggled to raise necessary funding. 

Over the weekend, the company filed voluntary petitions for relief under Chapter 11 in the United States Bankruptcy Court. Bed Bath will wind down its businesses while conducting a process to gauge interest in the sale of some or all of its assets. 

Bed Bath received a commitment of approximately $240 million in debtor-in-possession financing and expects it to provide necessary liquidity to support operations throughout the bankruptcy process. 

"We deeply appreciate our associates, customers, partners, and the communities we serve, and we remain steadfastly determined to serve them throughout this process. We will continue working diligently to maximize value for the benefit of all stakeholders," said Sue Gove, president and CEO of Bed Bath & Beyond.

Bed Bath said it will strategically manage inventory in case it finds a buyer for its businesses. If a sale is successful, the company will pivot to implement a transaction and preserve value. 

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BBBY Price Action: Bed Bath shares were down 34.3% at 19 cents at the time of publication, according to Benzinga Pro.

Photo: Phillip Pessar from Flickr.