Bed Bath & Beyond surges for third day in meme-stock rally

Jan 11 (Reuters) – Shares of Bed Bath & Beyond (BBBY.O) jumped on Wednesday as individual investors piled in, boosting the stock’s rebound from last week’s multi-decade low and rallying other meme stocks. revived.

Among the top three companies trading on Fidelity’s retail platform, Bed Bath & Beyond jumped 69% during the session and then followed by Bell by 20%. Including those late gains, it has more than tripled so far this week.

Other popular stocks among retail traders also soared, with GameStop (GME.N) up 7% and AMC Entertainment (AMC.N) up 21%.

On Tuesday, Bed Bath & Beyond said it would lay off more employees to cut costs after reporting a higher-than-expected quarterly loss.

Shares of the struggling US home goods retailer hit their lowest since the 1990s last week after the company announced its intention to explore options, including bankruptcy.

The rise and fall of Bed Bath & Beyond

Analytics firm S3 Partners said in a research note that short interest in Bed Bath & Beyond stood at $82.7 million, or 52.07% of its free float.

S3 Partners indicated that retail investors are mostly betting on growth in the stock, while bets against the company are being placed mostly by large institutional investors, setting the stock up for volatile trading.

Ihor Dusanivsky, managing director of Predictive Analytics at S3, wrote, “If bankruptcy isn’t in BBBY’s future, its rallying stock price could leave short sellers running for the door to retain some of the mark-to-market profits they’ve earned in 2022.” Will force.” partner.

According to Trade Alert data, Bed Bath & Beyond’s options volume was trading at nine times normal based on recent trading.

Most trading interest was concentrated in near-dated options, with contracts expiring on or before January 20 accounting for nearly 70% of the volume.

As a sign that traders expect the stock to remain highly volatile in the coming days, the stock’s 30-day implied volatility, a gauge of how much traders expect the stock to swing in the near term, was 330%, Which is about the highest level. At least four years, Trade Alert’s data showed.

In a meme stock frenzy nearly two years ago, retail punters banding together on online forums bid up shares of Bed Bath & Beyond, costing hedge funds billions of dollars in the recession.

Reporting by Medha Singh in Bengaluru and Saqib Iqbal Ahmed in New York; Additional reporting by Bansari Mayur Kamdar and Amrita Khandekar, and by Noel Randwich in Oakland, California; Editing by Shinjini Ganguly, Majoo Samuel and David Gregorio

Our Standards: The Thomson Reuters Trust Principles.

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