Meme stocks see big sell-offs as GameStop plummets and Bed Bath & Beyond craters on plans to raise new funds
- Shares of Gamestop and AMC plunged in tandem with Bed Bath & Beyond on Tuesday as investors dove out of meme stocks.
- The sell-off was spurred by Bed Bath & Beyond's new fundraising deal to avoid bankruptcy.
Meme stocks are being rocked on Tuesday as Bed Bath & Beyond dives on its new plans to avoid bankruptcy, with shares of GameStop and AMC also plummeting.
GameStop shares sank 12% to $21.07, bringing the stock down 74% from its all-time high of $81.25. Meanwhile, AMC shares fell 7% to $6.27, dragging the stock down 89% from its record $59.26.
In 2021, both stocks joined Bed Bath & Beyond on the path to dizzying highs, though investors' frenzied purchasing of shares has died off over the past year amid rising interest rates, which have lowered demand for more speculative assets in the market.
The latest sell-off was fueled by Bed Bath & Beyond unveiling its new plan to avoid bankruptcy, with the retailer recently securing a $225 million fundraising deal as it struggles to stay in business. The company expects to receive $1 billion in funding in total, the Wall Street Journal originally reported.
Shares of the struggling home goods retailer initially soared 120% on Monday, then sank in after-hours trading. As of midday Tuesday, Bed Bath & Beyond stock had plunged 45% from its closing price on Monday, with shares trading at $3.17.
Bed Bath & Beyond has struggled financially for years, and last week warned it could soon file for bankruptcy after defaulting on a loan from JPMorgan and announcing it would close another 87 stores.
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