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$BBBY – What Happens To Short Sellers, If Bed Bath & Beyond Goes Private?

As per Morningstar data, 105.6% of $BBBY (Bed Bath & Beyond) float is now short. Yes, you read it correct, more than 100% of Bed Bath & Beyond’s stock is short. How is it possible? May be hard working Americans should post this question the SEC or the DTCC . It’s quite obvious that something is not right, but the SEC is busy going after celebrities like Kim Kardashian, rather than looking at issues related to naked short selling.

What exactly happens to a firm that is short on Bed Bath & Beyond, when it decides to go private?

Firstly, Bed Bath & Beyond will buy all the outstanding shares. As per Yahoo finance, the Shares Outstanding = 80.25M

Secondly, there will “share recall” and the short sellers have to buy the shares from the open market. The only issue apart from the float being short over 100% is that, 81.93% are held by institutions. That means Hedge Funds who have shorted $BBBY beyond the float, might be liquidated and eventually have to close down.

The only hope for short sellers now, is to flood Bed Bath & Beyond with lawsuits to delay the company to go private.