When the Nasdaq exchange opens on Wednesday, it will be one stock lighter, as Bed Bath & Beyond starts the process of delisting from the public market.
As of May 3, trading in Bed Bath & Beyond ‘s common stock will be suspended, the company said in a filing to the Securities and Exchange Commission. The Nasdaq sent Bed Bath a delisting notice following the company’s April 23 filing for chapter 11 protection.
On Tuesday, Bed Bath’s last full trading day, the shares lost 27%, closing at 7 cents. Bed Bath stock is down 97% this year, and has shed roughly 99% of its value in the last three-year period. Analysts had warned that this would happen—bankruptcy filings tend to result in lost value for shareholders,
But Bed Bath wasn’t always a drag on investors’ portfolio. In fact, for most of the 2000s and early 2010s, the stock outperformed its retail peers and the broader market.
In memoriam of Bed Bath’s coming delisting, Barron’s is reviewing the stock’s highs and lows.
The company, then called Bed ‘n Bath, was founded in 1971 by Warren Eisenberg and Leonard Feinstein. The original shops mostly carried linens and towels, but by 1987, the company had expanded its merchandise assortment to carry other household wares—prompting the name change to Bed Bath & Beyond.
Five years later, Bed Bath made its debut on the public market, listing on the Nasdaq exchange in June 1992. The next 20 years ushered in an era of rapid growth for the retailer. The company reported its first year with over $1 billion in sales by the end of fiscal 1998, and by 2006, it operated 888 stores in 48 states, up from 34 in 1992. Bed Bath had also completed the acquisition of Buybuy Baby.
Investors rewarded the company’s performance. In the 20 years following its initial public offering, Bed Bath stock gained over 5,700%, trumping the S&P 500’s 233% gain during the same period and the Nasdaq Composite’s 420% rise. The stock closed at a record high in January 2014, at $80.48, according to Dow Jones Market Data.
Things started taking a turn for the worse in the latter half of the 2010s. E-commerce became more popular, ratcheting up the pressure on bricks-and-mortar retailers and heralding in the so-called retail apocalypse.
Bed Bath was one of the companies that was slow to hop on the online shopping bandwagon.
“We missed the boat on the internet,” Eisenberg recently told The Wall Street Journal.
Same-store sales began to slip as early as 2015, but full-year revenue didn’t start declining until a few years later. In February 2019, the company reported the first unprofitable quarter of many to come. By the end of the year, the stock had shed roughly 80% of its value from its record high in January 2014.
Bed Bath embarked on multiple plans in an attempt to turn business around. That included hiring—and then firing—former Target (TGT) chief merchandising officer Mark Tritton to helm the company; starting—and then canceling—a private-label strategy; and shuttering stores in favor of carving out its online footprint.
Those efforts proved to be too little, too late, and many analysts expected the pandemic would deal the final blow.
And it probably would have, had it not been for the meme-stock trading frenzy, when retail investors flooded the market in droves in 2021 in a crusade to save the stocks they felt had been unjustly shorted by Wall Street.
Bed Bath quickly became a favorite among the meme stock crowd.
In January 2021, Bed Bath shares rose as much as 204% on an intraday basis. That was the first of several meme-trader fueled stock jumps, which lasted well into 2022 and 2023. The injection of capital from retail investors may have bought Bed Bath time to execute a turnaround strategy, but it still wasn’t enough.
On Jan. 5, Bed Bath first warned it was considering filing for bankruptcy, setting off a series of creative financial maneuvers designed to stave off a potential filing. For the better part of four months, the strategies worked, surprising many in the industry. Bed Bath announced two separate equity offerings and secured a loan that kept it afloat while it looked for alternatives.
Ultimately, however, the company’s ailing finances and bloated balance sheet caught up with investors.
“With few hard assets, the company was valued in billions with crippling debt and marginal shareholder equity left, which today is negative,” wrote Paul Gray, managing partner of Ironhold Capital. “Artificially inflated meme-stock prices only delayed its eventual bankruptcy, while devouring additional capital.”
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