Bed Bath & Beyond Inc (BBY), the one-time meme stock favourite, rallied almost 6% last night as its broker announced plans to sell 112mln shares to shore up its battered finances.
Shares rose to 31 cents on the news though they have fallen by 86% in 2023 so far on fears over its survival.
BBY had already warned that it faces bankruptcy if its plan for a US$300mln equity raise falls through.
That involves shareholders agreeing to either a huge increase in its issued shares or consolidation by between 10-20 shares into one.
In the prospectus for the sale, BBY said it expects to report another loss in the quarter to end-February 2023 with sales slumping by between 40-50% to around US$1.2bn net.
Earlier this month, the struggling household products retailer had arranged a US$120mln credit line from suppliers for its top-selling ranges backed by credit specialist ReStore.
Full-year results will be published at the end of April, it said.