Why Bed Bath & Beyond Stock Plummeted on Wednesday
Shares of Bed Bath & Beyond (NASDAQ: BBBY) plummeted on Wednesday after the company made a couple of announcements prior to the market open. First, it revealed a share-repurchase plan. Second, it released an investor presentation including its three-year targets. While both were intended to be positive developments, investors apparently weren't as enthusiastic as management. As of 12:45 p.m. EDT, Bed Bath & Beyond stock was down 12%.
When a company buys back its own stock, it can boost shareholder returns because each remaining share in circulation represents a larger percentage of the company. For obvious reasons, Bed Bath & Beyond, stopped repurchasing its shares earlier in 2020. However, it just announced it will buy back up to $675 million worth of stock over the next three years -- and $225 million of that authorization is to be spent by Feb. 27 under an accelerated plan.
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Source Fool.com
