Bed Bath & Beyond Inc. led a revenge of the meme stocks Monday, with shares rallying 92%, but the stock turned around hard in after-hours trading as executives announced plans to sell convertible shares to get out of a loan default. Bed Bath & Beyond
BBBY,
+92.13%
will attempt to sell convertible preferred stock as well as warrants to purchase common shares and convertible preferred stock. The company expects to raise at least $225 million in the sale, but hopes for more than $1 billion, noting the possibility of “an additional approximately $800 million of gross proceeds through the issuance of securities requiring the holder thereof to exercise warrants to purchase shares of Series A Preferred Stock in future installments assuming certain condition [sic] are met.”
In a filing with the Securities and Exchange Commission on Monday, Bed Bath & Beyond disclosed that JPMorgan Chase & Co.
JPM,
+0.59%
and other creditors had agreed to work with the retailer if it could raise the money. Bed Bath & Beyond disclosed in late January that it was in default on loans that were called in, leading to accelerated payment and other demands, but banks agreed to waive or rescind those demands and rework the retailer’s credit facilities in exchange for proceeds from the offering, according to Monday’s filing. The beleaguered retailer was expected to file for Chapter 11 bankruptcy, but that hasn’t stopped its stock from enjoying a sharp rise to start the year. Bed Bath & Beyond shares are up 133% to start the year, taking into account Monday’s gains. The stock was halted …