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by lbwtaylor
1149 days ago
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> They didn't sell nearly enough shares. This doesn't seem to be right. From Matt Levine: >On Jan. 20, Bed Bath & Beyond Inc. had about 117.3 million shares of common stock outstanding; the stock closed that day at $3.35 per share. On March 27, it had about 428.1 million shares outstanding, at $0.7881 each. On April 10, it had 558.7 million shares outstanding, at $0.2961 each. Yesterday, April 23, when it filed for bankruptcy, it had 739,056,836 shares outstanding. 1 The stock closed at $0.2935 on Friday. https://archive.is/PXnpB Seems like they sold as much as possible, enough to crater the stock, but not save the company. |
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If they had actually sold earlier when the stock was largely mispriced to the upside, they may have been able to turn it around. Good capital management is raising money when you dont need it in preparation for time that you do… not panic selling as your stock is already on the verge of bankruptcy.
My commentary was exactly that. That companies should raise when their stock is fundamentally overvalued. There are hundreds of companies out there that sure wished they had raised in 2021. Many of them are likely to follow in BBBY’s footsteps
Really poor execution by CFOs across the board. I think a combination of being overly optimistic, plus personal incentives against lowering the share price in the short term (Stock based comp, board may be short term oriented and decide to fire you, etc).