A view of a Bed Bath and Beyond store in Daly City, California.
Justin Sullivan | beautiful pictures
Shares of Outdoor shower bed rallied more than 60% on Monday as meme traders appeared to be betting on the stock despite any obvious catalysts for the move.
The much-shorted stock, which has fallen more than 44% this year, was the most searched name on Reddit’s WallStreetBets discussion board on Monday, according to the Quantitative Quiver. A user in a pinned thread titled “GME, BBBY and AMC Memestock Megathread for Monday, August 8, 2022” appears to be buying shares of retail stock.
One user said they “borrowed 27k, using BBY”, which a group moderator seems to have confirmed. Another user (TheDude0007) allegedly took advantage of BBBY’s spike, turning $45,000 into nearly $450,000 using common stock and call options.
Bed Bath & Beyond is part of the meme stock craze that has hit Wall Street in recent years and fueled names like GameStop and AMC Entertainment higher when investors buy stocks and force short sellers to try to cover their losses, creating what is known as “short squeeze”. According to data from FactSet, a whopping 46% of the outstanding shares are sold short.
As many retailers deal with Consumers are wary of inflation and excess inventoryBed Bath & Beyond has struggled to reverse declining sales, fix its business strategy and win back customers who have fled to its competitors. It is also looking for a new leader after the board announced in late June that CEO Mark Tritton has left the company.
At the same time, Union, the New Jersey-based home appliance retailer, is also burning through cash as its net loss grows. While the company hasn’t released a forecast, it said it expects in-store sales trends to improve after a sharp 24% year-over-year decline in the quarter ended May 28. .
Shares of GameStop and AMC rose more than 9% and 14%, respectively, on Monday.
– CNBC’s Melissa Repko and Jack Stebbins contributed reporting.