Bed Bath Beyond stock drops 24% after disappointing earnings

The fundamentals are particularly important during a market rout, as investors bet that Bed Bath Beyond Inc. will be the next meme stock to go to the moon.

The shares of the home-goods retailer dropped by 24% to $4.99 on Wednesday, its lowest since April 2020, after the company reported disappointing earnings. It follows a tumultuous two-year stretch when the company captivated retail traders alongside stocks like AMC Entertainment Holdings Inc. and GameStop Corp.

Ed Moya, senior market analyst at Oanda said the retail investor is learning a hard lesson as all the favorite meme stocks are getting crushed. The outflows for Bed Bath Beyond, a favorite retail stock, have been significant and the coordinated buying is not happening. Bed Bath Beyond's quarterly loss was wider than anticipated and first-quarter comparable sales and net sales fell short of estimates. Vital Knowledge spokesman Adam Crisafulli said investors expected the worst from Bed Bath Beyond, but they were still disappointed. The retailer's stock extended its losses Wednesday from its January 2021 closing high to 91%.

Retail investors showed that old habits die hard. Bed Bath Beyond was among the most bought stocks on Fidelity's platform as individuals ignored the sales miss, piling in amid the share slump. The stock saw a surge in interest on websites like Reddit's WallStreetBets and Stocktwits with the company s ticker trending for most of the day on both platforms.

Just before the election, the Union, New Jersey-based company named Sue Gove as its interim chief executive, replacing Mark Tritton.

The company was caught up in meme stock mania at the beginning of last year, and again in June as investors snapped up shares in a coordinated effort that was channeled through social media platforms.

Another big jump came in March of this year when Ryan Cohen's investment firm RC Ventures called for a shake-up at the company, but the move didn't gain momentum as meme stocks and riskier assets faltered. In January 2021, the company's market value rose to a peak of $6.4 billion, a far cry from its current $399 million valuation.

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