Bed Bath & Beyond plans to sell $300 million in stock, again warns of bankruptcy

(Reuters) -Bed Bath & Beyond Inc on Thursday announced plans to sell $300 million worth of its shares as the struggling retailer looks to raise more capital, and warned again that it would likely have to file for bankruptcy if it did not get the proceeds.    Shares of the company fell as much as 16% to a record low of 65 cents as the company said it had terminated its previous public equity offering and all outstanding warrants for Series A Convertible Preferred Stock made in February.    The company had planned to raise around $1 billion through the offering of preferred stock and warrants in a last-ditch attempt to avoid bankruptcy, and had so far raised $360 million through the complex deal.    The latest stock offering plan comes as the company risked losing additional funding from key investor Hudson (NYSE:) Bay Capital Management, as its stock price trades below $1.

On March 20, Bed Bath & Beyond (NASDAQ:) stock dropped 21% to close at 81 cents after the company’s announcement that it was seeking shareholder approval for a reverse stock split.

The company, which reached an agreement with B Riley on Thursday, expects to use the net proceeds to help with strategic initiatives in fiscal 2023, such as investing in merchandise inventory, increasing store footprint and realigning cost structure.

Separately, Bed Bath said it expects fourth-quarter comparable sales to decline in the range of 40% to 50%, compared with analysts’ estimates of a 26.3% drop, according to Refinitiv data.

The retailer added it also expects operating losses to continue and fourth-quarter net sales to be about $1.2 billion, compared with estimates of $1.43 billion.