As Bed Bath & Beyond folds, how safe is GameStop (GME) stock?

Bed Bath & Beyond finally decided to file for bankruptcy protection on Sunday after the company’s funds ended. This move was expected considering that the BBBY stock price was down by over 91% in the past three months.

Bed Bath & Beyond filed for bankruptcy protection because the company run out of cash. It has struggled to raise enough cash in the past few months. In a recent statement, the firm said that it needed about $375 million to get to the holidays.

The most recent results showed that it had $153 million in cash and short-term investments against long-term debt of over $1 billion. Its short-term debt was about $907 million. Therefore, with its sales dwindling and losses rising, the company had no chance of survival without capital infusion.

Therefore, there are concerns about popular meme stocks like retailers GameStop and Wish.com. However, while the long-term viability of GameStop is uncertain, the reality is that the company is not going bankrupt soon.

Unlike Bed Bath & Beyond, GameStop has one of the best balance sheets in the industry. The firm has over $1.39 billion in cash and short-term investments and little debt. It has no short-term borrowings and just $28.7 million in long-term debt. The company said the following in its most recent earnings call:
“At the end of the year, we had no borrowings under our ABL facility and no debt other than a low-interest unsecured term loan associated with the French government’s response to COVID-19.”