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- Short-sellers betting against Bed Bath & Beyond have raked in over $1 billion as the company finally filed for bankruptcy.
- The shares tanked 99% over the past year, as the home goods retailer suffered months of trouble.
- Bed Bath & Beyond said it will kick off sales at all locations on Wednesday.
Short-sellers have raked in more than a billion dollars in paper profits from Bed Bath & Beyond's bankruptcy, while novice investors have suffered huge losses.
Investors betting against the US home-goods retailer have made $1.3 billion since the stock peaked in January 2021, with the 99% crash over the past 12 months delivering $142 million in mark-to-market profits, Bloomberg reported Tuesday, citing S3 Partners data.
The home furnishings retailer was trading at $0.18 at close on Monday, having reached highs above $52 in January 2021.
Shorting stock typically involves borrowing shares and immediately selling them, with the goal of buying those back later when they fall in price - and pocketing the difference.
Meanwhile, retail traders who invested in the meme-stock are likely sitting on losses of nearly $140 million this year, per the outlet's analysis of Vanda Research data. Such investors injected more than $730 million into the firm over the past two years, the data shows.
Bed Bath & Beyond went bust Sunday, filing for Chapter 11 bankruptcy protection in New Jersey. The filing ends months of troubles for the chain that included closing hundreds of stories and laying off staff to shore up its finances.
The retailer said it will stop accepting coupons after April 25 and will kick off store-closing sales at all 360 locations on April 26.