For a company that is losing in just about every way — top line, bottom line, market share and senior management – Bed Bath & Beyond is once again a stock market darling.
On Monday morning, the stock was up as much as 40%, continuing its move upwards over the past few trading days. In fact, after bottoming out in late June following a disastrous quarterly report that led to the exits of both the CEO and chief merchant, the stock has more than doubled, trading at over $11 a share by mid-morning Monday.
What gives?
According to a CNBC report the troubled Big Box retailer’s stock is once again caught up in the meme frenzy of day trader speculation, a situation it has seen before. “Meme traders seemed to be betting on the stock despite any apparent catalyst for the move,” CNBC reported.
Trading in the stock is up substantially from its recent average: close to 59 million shares had traded hands by just 10:30 am today versus a typical 8 to 9 million volume. Bed Bath continues to be one of the most heavily shorted stocks on Wall Street, with CNBC citing data from FactSet that shows 46% of its shares being sold short. Seeking Alpha reported on Friday that “a short squeeze is likely in progress,” where investors are buying up shares to cover their bets against the company.
Bed Bath has not responded to previous inquiries from Warrensreport or other media for comment.
Over the past two years in previous meme-driven spikes the company’s shares have soared to as high as $52 a share only to fall just as quickly as the speculation faded. The same thing has occurred to other meme favorites like AMC and GameStop, both of which have also had rising stock prices over the past few days although neither as high as BBBY.
Bed Bath has been struggling to right itself after several quarters of revenue declines and market share losses following the failure of its new merchandising plan to catch on. It is searching for a new CEO while an interim one from its board holds down the fort. The retailer has said it expects to provide an update to investors sometime in the next few weeks, although it has gone beyond its original timetable of providing details by the end of July.
In the meantime the stock is at it again.
WarrensReport 