To The Moon

Bed Bath & Beyond looks like a $1 stock to Loop Capital

Loop Capital Markets is not backing off its bearish stance on Bed Bath & Beyond (NASDAQ:BBBY) $Bed Bath & Beyond(BBBY)$after the recent share price jump.

Analyst Anthony Chukumba thinks the meme-inspired short squeeze rally does not alter the poor fundamentals for the retailer.

Chukumba said recent channel checks by the firm indicated widespread out-of-stocks, heavily discounted private label merchandise, dirty stores, and disengaged employees.

He was also skeptical that the new financing would save the day for BBBY.

"We also doubt a new ABL would make BBBY’s vendors— who we continue to worry could place the company in a death spiral by demanding more onerous payment terms—any more comfortable about BBBY’s near- and long-term prospects."

Loop estimates that the BBBY would have to raise at least $500M to settle its current debts and significantly boost its liquidity. A capital raise to raise those kinds of funds is seen as diluting current shareholders by around 37%.

Loop Capital kept a Sell rating on BBBY and price target of $1.