The moment of truth is nigh of truth for the bulletin board warriors who pushed shares in Bed Bath & Beyond Inc up 35% on Monday.
The surge in the value of the stricken chain was driven by the belief a bidder may be waiting in the wings.
Early Tuesday we hear directly from the company unless it ducks its scheduled results announcement.
Ahead of the crucial update retail stock forums, including Reddit, were buzzing with discussions of a possible M&A deal, fuelling a buying frenzy.
The clamour was reminiscent of the "meme stock" phenomenon of 2020, in which shares of troubled companies such as GameStop Corp (NYSE:GME) and AMC Entertainment Holdings (NYSE:AMC) soared amid viral interest on forums such as WallStreetBets.
Yet the surge came after the company warned last week it may not be able to carry on as a going concern and may have to seek relief through bankruptcy, as reported by Reuters.
Bed Bath & Beyond has struggled for years with shrinking sales as it tried and failed to compete against Amazon and other rivals, with investors pointing to problems such as cluttered stores and an over-reliance on discount coupons. Its shares fell 83% in 2022.
According to a filing last week, Bed Bath & Beyond expects to show a net loss of $385.8 million for its fiscal quarter ending in November, including $100 million of impairment charges when it reveals the full extent of the carnage later on Tuesday.