This week, one question continues to plague retail investors: Can Bed Bath & Beyond (OTCMKTS:BBBYQ) be saved? However, a better question might be whether BBBYQ stock is beyond redemption. My answer to that? A resounding yes.
Ever since this fallen meme stock delisted from the Nasdaq after declaring Chapter 11 bankruptcy, shares of BBBYQ have struggled to regain any momentum. Given that it’s currently down more than 86% so far this year, it’s hard to have much faith in Bed Bath. Lately, though, the stock has been rising on speculation around a prominent investor getting involved.
Bed Bath & Beyond is preparing for a stalking horse bid, scheduled for June 1. This could allow a motivated buyer to take control of the struggling company. Earlier this week, speculation rose that Ryan Cohen could throw his hat in the ring. Now, however, investors are also wondering whether Carl Icahn will step in.
Could Carl Icahn Save BBBYQ Stock?
Usually, when Carl Icahn comes knocking at a company’s door, it’s not a good sign. The noted “corporate raider” rose to prominence in the 1980s for his activist investor strategy, taking large positions in struggling firms and demanding significant changes, often sending shares up in an “Icahn lift” as a result. With this in mind, it makes sense that Icahn might take a position in troubled Bed Bath & Beyond. An Icahn lift would actually be one of the few things that could help BBBYQ stock.
To be clear, though, Icahn has issued no statements indicating that he’s interested in Bed Bath & Beyond. A few months ago, a post on Reddit made the case for why he might be, citing Icahn’s ties to Newell Brands (NASDAQ:NWL), a publicly traded consumer goods company whose products are sold at Bed Bath retail locations. Per the Reddit post:
“Some of you may already know that Carl Icahn’s West Point Home brands are sold in BBBY, but a lesser known fact is Carl Icahn is invested in Newell and his son sits on the Board of Directors there. In his latest interview with Forbes, Icahn talks about how hard it is to find synergies and how they look for the hidden jewel in a company. Icahn Enterprises is already well known, invested, and successful in this sector.”
Back in January, a Seeking Alpha contributor also reported that this theory had grown in popularity.
It’s not hard to see why. When a company is in deep trouble and shows no signs of recovering, it’s natural to hope for a hero to step in to help boost your investment. But in this case, there’s no actual evidence that Icahn has any interest in Bed Bath & Beyond.
Investors shouldn’t be too optimistic unless Icahn expresses some interest, or takes steps toward getting involved. Unless that happens, BBBYQ stock is likely to quickly return to its typical pattern of decline.
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On the date of publication, Samuel O’Brient 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.
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