Struggling retailer Bed Bath & Beyond is making another significant move in an attempt to avoid bankruptcy. In a press release made on Friday, the company announced its plans to seek approval from its shareholders for a reverse stock split.
The proposed split is set to be in the 1-for-5 to 1-for-10 range, with the final ratio set to be determined by the Bed Bath & Beyond board. The company hopes that the move will result in a “higher per-share trading price” and increase the interest of investors in its stock.
“Our proposal for a reverse stock split will enable us to continue rebuilding liquidity to execute our turnaround plans and better position the Company financially,” said Sue Gove, the President & CEO of Bed Bath & Beyond. “We look forward to engaging with shareholders and continuing to provide meaningful updates as we progress with our strategy.”
Once a prime destination for domestic merchandise, Bed Bath & Beyond struggled in recent years, dealing with poor sales and failure to adjust to the increased competition. The company has been reportedly considering bankruptcy for a while now but has delayed the final decision until it exercises all other options.
Bed Bath & Beyond stock dropped almost 18 percent in after-hours trading, sliding from a close price of $1.03 per share to $0.85 later in the day. The company’s shares have lost more than 95 percent of their value in the past year.