Why is Bed Bath & Beyond Stock Up 25% in Just Five Days?

Bed Bath & Beyond has racked up big losses with significant drops in same store sales and it fired its CEO and chief merchant. Yet over the past week its stock price is up more than 25% on heavier-than-usual trading volume.

What gives?

There have been no recent announcements or changes at the troubled Big Box home furnishings retailer that would suggest this activity and a company spokesperson did not immediately respond for comment.

But a stock that bottomed out at $4.38 a share in early July is trading at $6.10 at mid-day Tuesday, its highest level since reporting terrible first quarter numbers that resulted in the departure of its two top executives who had been leading a turnaround effort over nearly the past three years. Trading volume as of around noon on Tuesday had topped 12.2 million, up from the trailing five-day average of 7.54 million shares a day changing hands.

Analysts who follow the stock have been generally negative recently, with Bank of America saying the company’s balance sheet was most troubling. A blistering Wall Street Journal analysis a week ago laid out the failures in Bed Bath’s turnaround plan and didn’t offer much in the way of encouragement for the immediate future.

The only pieces of good news were some insider stock purchases – interim CEO Sue Gove bought 50,000 shares at under $5 a share so has already had a nice return on her investment — and the disclosure in late July that Freeman Capital had bought a 6.1% stake in the company as an investment. Bed Bath stock is still being heavily shorted by some investors who are probably not thrilled with this recent spike in the share price.

Bed Bath is dealing with multiple problems right now, from a squeeze on its cash position to the slowdown in sales in its overall business. It also is considering a sale or spin-off of its BuyBuyBaby unit which some analysts have said could generate up to $1 billion in a sale for the company. In the meantime chapter 11 bankruptcy speculation is rampant given the burn-rate of the retailer’s remaining cash and credit lines.

Despite any new positive news coming out of the company, at least some investors seem to be saying that with the stock price so low Bed Bath stock is worth a flyer. Defying obvious logic is, after all, one of the hallmarks of Wall Street.