Bed Bath & Beyond Stock Jumps 90% Monday Before Reversing After Hours: What's Going On?

Bed Bath & Beyond Inc BBBY shares are diving in Monday's after-hours session after the stock rocketed higher earlier in the day. The company proposed an offering following a nearly 100% gain in Monday's regular trading session.

What To Know: Bed Bath & Beyond has proposed an underwritten public offering of shares of the company's Series A convertible preferred stock, warrants to purchase shares of Series A convertible preferred stock and warrants to purchase the company's common stock.

The embattled retailer expects to raise approximately $225 million of gross proceeds in the offering and an additional approximately $800 million through the issuance of securities requiring the exercise of warrants.

Bed Bath said it intends to use the net proceeds from the initial closing of the offering to repay outstanding revolving loans under its ABL Facility. 

What Led To The Offering? The struggling retailer's stock has been extremely volatile over the last month as the company has been considering strategic alternatives, including potential bankruptcy. In early January, Bed Bath said multiple paths were being explored and next steps were expected to be determined soon.

Near the end of January, Bed Bath revealed that it did not have "sufficient resources to repay the amounts under the Credit Facilities," per a regulatory filing. Shares were halted to the downside before bouncing back.

Monday's trading action appears to be very speculative. The stock was trending on various social platforms in early trading. 58.77% of the float is currently sold short, per Benzinga Pro.

Bed Bath's average session volume over a 100-day period is approximately 37.82 million. Monday's session volume exceeded 254 million and the stock remains volatile after hours. It was the top trending ticker on Stocktwits at last check. 

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BBBY Price Action: Bed Bath has a 52-week high of $30.06 and a 52-week low of $1.27.

The stock was down 17.4% in after hours at $4.86 after surging 92.1% in Monday's regular session.

Photo: courtesy of Mike Mozart from Flickr.