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- Bed Bath & Beyond is ready to file for bankruptcy as soon as this week, according to Reuters.
- The company defaulted on a loan to JPMorgan and said it would close 87 stores last week.
- Bed Bath shares climbed 1.7% ahead of Tuesday’s opening bell.
The retailer will bring in liquidators to close its stores unless it’s able to negotiate an unlikely last-minute rescue package, according to a report by the publication that cited four people familiar with the matter.
Bed Bath said Thursday that it lacked the cash required to pay its debts and had received a default notice from JPMorgan, taking it one step closer to a potential bankruptcy.
The company then said the following day that it is preparing to shut down 87 more of its stores – following the 150 closures it announced last year.
Shares fluctuated wildly last week, plunging as much as 35% after the default announcement but staging a 17% rally Friday with investor sentiment buoyed by the expectation that the store closures would help the firm to save up some cash.
Bed Bath shares climbed 1.7% to $2.92 in early-morning trading Tuesday.
The retail chain is seen by some analysts as a “meme stock” alongside companies such as GameStop and AMC Entertainment, enjoying a high level of popularity with retail investors despite poor underlying financial data.
It has climbed 14% year-to-date, benefiting from the store closures it has announced as well as the market’s expectation that the Federal Reserve will start slashing interest rates at some point later this year.