A view of a Bed Bath and Beyond store in Daly City, California.
Justin Sullivan | Getty Images
Bed Bath & Beyond and AMC Entertainment surged Monday as meme traders gave the impression to be betting on the stock despite the shortage of any apparent catalyst for the move.
Shares of each heavily shorted stocks closed up nearly 40% and eight%, respectively. GameStop also climbed 8.6%. At one point within the session, Bed Bath & Beyond shares soared as much as 63%. Bed Bath & Beyond shares posted their biggest one-day gain in greater than a yr.
As of midday Monday, Bed Bath & Beyond was probably the most searched name on Reddit’s WallStreetBets discussion board, in keeping with Quiver Quantitative. Users under a pinned thread titled “GME, BBBY and AMC Memestock Megathread for Monday August eighth, 2022” seemed to be buying up shares of the retail stock.
One user said they “took out a 27k loan, went all in on BBY,” which a bunch moderator appeared to confirm. One other user (TheDude0007) alleged to have capitalized on the BBBY spike, turning $45,000 into almost $450,000 using common stock and call options.
All three stocks have been an element of the meme stock craze that has hit Wall Street in recent times and driven these names higher as investors bought up shares and compelled short sellers to try to cover their losses, creating what’s often known as a “short squeeze.” In keeping with data from FactSet, a whopping 46% of the stock’s float is sold short.
As many retailers address inflation-wary consumers and excess inventory, Bed Bath & Beyond has struggled to reverse declining sales, fix its merchandising strategy and gain back customers who’ve fled to its competitors. It is also been trying to find a recent leader after the board announced in late June that CEO Mark Tritton had left the corporate.
At the identical time, the Union, Recent Jersey-based home goods retailer has also been burning through money as its net losses grow. While the corporate has not provided a forecast, it said it expects same-store sales trends to enhance after plummeting 24% yr over yr within the quarter ended May 28.
— CNBC’s Melissa Repko and Jack Stebbins contributed reporting.