The time for Bed Bath and Beyond is up

The year 2021 was the first time Bed Bath & Beyond became one of the meme stocks that shares soared due to the sudden interest of the investors of online retailers. But the retailer of home furnishings' future is in doubt following an unsatisfactory holiday sales season didn't help resolve the company's financial problems that are getting worse.

Bed Bath & Beyond is currently evaluating a range of possibilities, including the possibility of raising cash by selling a part of its operations or the entire company. If those plans do not succeed, the only alternative is to file for bankruptcy.

The holiday season for the retailer was depressingly bad. Bed Bath & Beyond predicted a possible loss of $386 million in the most recent quarter, which is down 40% from the same year in 2021. It also posted negative cash flows of $340 million in the last fiscal year, and paid $65 million for interest. At the time of its March report the month of March, it was in debt by around $3 billion of debt. Although the company is developing an ambitious restructuring strategy which requires the time and funds it might not have.

The process of raising money is becoming more difficult for struggling companies. Because of rising interest rates, loans for new projects are becoming more expensive and institutions that were able to take on the debt of riskier companies during times of boom are making only prudent choices. The volatile markets of the stock market have made the issue of equity difficult for a lot of companies which is a major issue for meme-stock companies that depended heavily on the issue of shares to fund their growth.

This is all not good news in the world of Bed Bath & Beyond:

- The retailer has taken out the loan of $375 million at Sixth Street in August, and it's not clear if the investment company is looking to lend more.

- The company also attempted to trade certain of its bonds in exchange in exchange for equity but the deal ended on Wednesday. The fact that the retailer has a significant debt burden suggests that its creditors would prefer holding the company's bonds to be given a higher priority in the event of a Chapter 11 case than if they swapped their bonds in exchange for equity.

Bed Bath & Beyond isn't the only meme-stock struggling. The chain of movie theaters AMC has had its shares fall 85 percent over the last year, and the Video game store GameStop has seen its shares fall 50 percent.

All of them face similar issues, according to David Trainer, the C.E.O. at the research and investment firm The New Constructs: "They don't have enough pretax profit to pay their interest payments," he stated to DealBook and added that they're experiencing negative cash flows and longer than 24 months' cash flow runway.

HERE'S WHAT'S HAPPENING

Rep. Kevin McCarthy redoubles his efforts to convince right-wing supporters. As the Republican speaker failed to get an 11th vote for speaker yesterday, he was negotiating with dissidents about a potential deal that could dramatically reduce his power if he's ultimately elected. There could be the possibility of a compromise however it's not clear the date or time when it can be reached.

U.S. jobs data may show slowing growth. The Bureau of Labor Statistics title ="">will announce the December employment numbers on December 6 at 8:15 a.m. Eastern. According to economists, around 100,000 jobs were added this month, which kept employment at 3.7 percent. Investors as well as the Fed will be monitoring the average hourly earnings increase as an indicator of inflation.

Tesla lowers pricing in China for the second time in under three months. The decision came following the company's announcement of an increase in sales in the second-largest market last month, trailing that of that of the United States, as it is up against stiff competition from Chinese rivals such as BYD. Tesla also cut costs for Australia, Japan and South Korea.

Samsung profits drop to an eight-year lowest level in eight years. Samsung's operating profits dropped 70% in the latest quarter, hampered by the sluggish demand of semiconductors, as well as other products such as televisions and smartphones. Samsung was also afflicted by an oversupply of computer chip market, specifically memories chips. Analysts believe is likely to continue.

The N.F.L. cancels the game that was postponed due to Damar Hamlin's collapse. The match against Buffalo Bills and Cincinnati Bengals Buffalo Bills and the Cincinnati Bengals which was postponed on Monday will not be played again and instead the league will change the way it plays its playoffs. The most important thing is that Hamlin is awake and capable of moving his feet and hands, and write, according to his doctors.

The F.T.C.'s new battle against noncompetes

Since taking over the F.T.C., Lina Khan has taken on a number of bold moves to increase federal competition oversight. This includes the use of litigation to stop prominent mergers.

However, she. Khan is taking on one of her biggest issues to date: calling for an end to non-compete agreements which restrict employees' access to competing companies or establish competing business. This initiative could boost the wages of workers, she claims. Khan argues, but some say the agency is far too broad.

The number of noncompetes has grown exponentially throughout the years. Often regarded as being more suited to high compensated workers such as software engineers, the clauses in contracts are believed to apply to up to 45 percent of the private sector workforce such as hair stylists, sandwich makers and interns.

The F.T.C. and those who support its efforts argue that these clauses restrict employees' wages since they block employees from switching jobs, and can make hiring more expensive for employers trying to determine who they are able to hire and who they cannot. A ban on them, the agency claims, could raise wages by more than 300 billion dollars a year. some studies have shown that wage increases have been seen when states have banned the use of these clauses.

However, the advocates of noncompetes claim that they force employers to be more likely to invest in employee education and sharing of sensitive information. They also claim that workers might be able to reject work that requires noncompetes or request a higher salary as compensation.

Expect a war over the F.T.C.'s authority. Ms. Khan isn't scared of engaging in fights she could lose in the event that they result in expanding the power of regulatorsreported to media that federal laws enables the agency to block unfair competition practices. (At the very least, there is a Republican commissioner in the F.T.C., however, seems to prefer a more narrow method of governing.)

Corporate trade groups claim that the legal foundations for this kind of rule are in question. "Congress has not given the F.T.C. any authority whatsoever it needs to issue the rules of competition," a top official of the U.S. Chamber of Commerce declared yesterday. Legal experts predict that lawsuits will contest any rule that is accepted.

A widening crisis in crypto

The aftermath of the demise of FTX is growing, because a growing number of crypto companies are subject to regulatory scrutiny or say they're in financial trouble. Here's a rundown of the most recent news:

Silvergate's shares fell after an outburst at the bank. The crypto-focused bank's stock dropped almost 43 percent on Tuesday after it announced $8.1 billion in withdrawals from its deposit accounts in the last quarter, causing it to sell its assets at the cost of a loss. The bank also refunded $196 million of spending on the technology of Diem Group, the blockchain payments initiative created by Facebook and stopped plans to launch its own cryptocurrency.

The founder of Celsius has been accused of fraud against the investors. New York's attorney general, Letitia James, filed a lawsuit against Alex Mashinsky who was the defunct crypto lender's previous C.E.O., accusing him of attempting to scam hundreds of thousands investors by falsely asserting that the platform of his company was as secure as the traditional banks. Celsius declared bankruptcy in during the summer leaving customers with billions of dollars worth of deposits that were lost; the firm claimed it was suing Mr. Mashinsky is no longer associated with its management.

Genesis has laid off around three-quarters of its employees and is contemplating filing for bankruptcy. The embattled brokerage has suffered massive losses due to loans it granted for Sam Bankman-Fried's Alameda Research and the hedge fund Three Arrows Capital. In the meantime, its owner, Digital Currency Group, is seeking to raise funds to repay creditors along with its CEO, Barry Silbert, is also fighting publicly with the cryptocurrency exchange Gemini.

The layoff contagion

Tech giants are reducing their staff, while Wall Street banks are preparing to eliminate thousands of workers over the next few weeks. They blame overhiring in the outbreak, economic downturns and the closing of a deal-making and fundraising boom.

Jeffrey Pfeffer, a professor of organizational behavior at the Stanford Graduate School of Business He has a different theory, which is Copycat behavior. "Why would you expect, in a world in which we know from a ton of research for a variety of behaviors that that behavior is imitated, that this is the one behavior that would not be imitated and socially influenced?" He said to DealBook.

Layoffs cost money, Pfeffer said. The decades of research prove that layoffs may not be effective in all cases. However, Mr. Pfeffer suggests that companies mimic the way their competitors are doing it instead of making a decision based on evidence. This is taking place in the tech sector, he says, where companies insist they have to reduce costs even though they have plenty of cash.

If businesses cut their staff - for example, due to a drop of deal flows or revenues -- they'll likely be required to pay substantial payment for severance. However, they'll also need to recruit again, which means spending money on recruitment costs, bonuses for hiring and onboarding expenses. They often hire employees who have been laid off as contractors too.

If companies in a particular industry make layoffs, and then embark on hiring sprees in tandem, hiring is competitive as well. "It's like buying high and selling low, which never struck me as a smart thing to do," Mr. Pfeffer explained.

and downsizing does not always improve your bottom line. A 2015 review of more than 55 research studies about how layoffs impact the performance of financials revealed the following "downsizing often does not yield anticipated benefits and that there is limited consensus among researchers on whether employee downsizing creates value."
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