In a lesson to bears that targeting beleaguered enterprises isn’t always the best idea, Bed Bath & Beyond (OTCMKTS:BBBYQ) stock is popping higher heading into the weekend. CNBC reports that at least two bidders are eyeballing the company’s Buy Buy Baby unit. As of this writing, BBBYQ stock is gaining more than 8%.
According to CNBC, the interested parties include an unnamed bidder, who is seeking to purchase the infant apparel and accessories brand “as a going concern.” The potential buyer plans on keeping approximately 75% of Buy Buy Baby stores open.
On the other end, Babylist — a direct-to-consumer baby registry website — is seeking Buy Buy Baby’s trademark and domain. Babylist CEO Natalie Gordon confirmed the company’s interest to CNBC.
Right now, reportedly no interest has materialized regarding the acquisition of the Bed Bath & Beyond banner and its stores. However, some bidders do appear to be “interested in buying its digital assets, a person familiar with the matter told CNBC.”
BBBYQ Stock Symbolizes a Sharp Fall From Grace
So far, the unknown bidder did not disclose their purchase offer for Buy Buy Baby. However, in correspondence obtained by CNBC, they did seek an “additional $50 million in capital to shore up its proposal.” As the outlet reports, that number “offers the first clue into how much bidders are willing to pay to snap up the pieces of Bed Bath’s fallen business.”
Of course, BBBYQ stock now undeniably symbolizes a sharp fall from grace. Not too long ago, shares under the BBBY ticker commanded a double-digit price tag. At its peak following the pandemic, BBBY traded hands above $35.
Unfortunately, the value of Bed Bath and its underlying intellectual property is ambiguous. Per the company’s most recent quarterly securities filing, management disclosed that the “intangible value of trade names and trademarks was just $13.4 million.” On the other end of the scale, court filings from late November reveal that Bed Bath held about $4.4 billion in assets and $5.2 billion in debts at the time.
A No-Go for Bears
On the surface level, BBBYQ stock may seem like an easy target for “negative” speculation. However, certain factors — like less regulatory oversight in the over-the-counter (OTC) market and low liquidity (resulting in wide bid-ask spreads) — intensify the risks here.
Perhaps most importantly, though, BBBYQ stock still carries some strong retail investor sentiment. At any moment, its market value could pop as a result of spurned investors looking to disrupt Wall Street.
On Penny Stocks and Low-Volume Stocks:?With only the rarest exceptions, InvestorPlace does not publish commentary about companies that have a market cap of less than $100 million or trade less than 100,000 shares each day. That’s because these “penny stocks” are frequently the playground for scam artists and market manipulators. If we ever do publish commentary on a low-volume stock that may be affected by our commentary, we demand that?InvestorPlace.com’s writers disclose this fact and warn readers of the risks.
Read More:?Penny Stocks — How to Profit Without Getting Scammed
On the date of publication, Josh Enomoto did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
