Bed Bath & Beyond Inc. (NASDAQ: BBBY) has been in financial peril for some time, with sales falling over 20% year over year and closing 150 stores. Despite this, the stock has had an incredible ride in the past week, soaring to more than double its previous value before dropping by half and recovering again. This wild volatility is caused partly by day traders attempting to time their investments, as well as rumors spreading across the internet that may not be accurate or even false.
On January 12th, Bed Bath & Beyond traded at $5.57 per share. It fell to $3.39 four days later before rising to a high of $4.14 on Tuesday. Investors were punished for their enthusiasm when the stock dropped soon after, leaving them with losses instead of gains. The underlying case that supports the unpredictability of the stock is due to its large debt; if Bed Bath & Beyond declare bankruptcy within weeks, common shareholders will likely be wiped out completely as creditors take ownership of all assets.
Despite this speculation and wild price changes, it appears that little action has been taken by the U.S. Securities and Exchange Commission to investigate what’s at play here or address rumors about the company’s financial status. It’s important for investors looking into Bed Bath & Beyond to understand both the potential rewards and risks associated with investing in any company at risk of bankruptcy. They should seek qualified financial advice from a professional advisor before making decisions regarding purchasing shares in BBBY or any other publicly traded firm facing similar issues.
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The volatile market surrounding Bed Bath & Beyond is a reminder that even stocks with strong potential can come with unseen problems or risks–it pays off in dividends (literally!) to do proper research ahead of time before investing financially in any business venture or publicly traded firm!