Meme investors are back and pushing Bed, Bath Beyond onto new winning streaks.
Dow Jones Market Data shows that shares jumped more than 80% in two days. The shares are down 25% year to date.
Experts say there is no fundamental reason behind the spike, although Benzinga speculated that AMC Entertainment's decision last week to issue a special APE dividend of preferred shares may have renewed interest in meme investing.
According to Quiver Quantitative, Bed, Bath Beyond was the top searched stock during the past one and seven day periods on Reddit's WallStreetBets discussion board.
WallStreetBets' 12.4 million members often bet on heavily shorted stocks of down-on- their-luck companies, gambling that short sellers will dump their shares when prices rise. Short sellers make money when stocks fall but can lose large when shares gain.
Nearly half of Bed, Bath Beyond's shares are shorted.
More than 10.8 million shares changed hands when the markets opened Monday, and volume continued throughout the day.
Share prices are stunning. On July 1, the shares hit a 52 week low of $4.38 and there was speculation that the company could go bankrupt.
The former CEO Mark Tritton left on June 29, along with Chief Merchandising Officer Joseph Hartsig. They were replaced by Sue Gove and Mara Sirhal.
Gove is a board member and founder of Excelsior Advisors, LLC, a retail consulting and advisory firm. Sirhal previously served as the general manager of the Harmon unit of the company.
The sales of Bed and Bath Beyond fell 25% to $1.46 billion for the first quarter ended May 28.
The net loss went up to $358 million from $51 million.
The COVID 19 stay-at home restrictions had benefitted the company. Net sales increased by 49% in the first quarter of 2021, but have been slowing as restrictions were eased and people started returning to work.
Sales fell 26% in Q 2 2021, 28% in Q 3 2021 and 22% in Q 4 2021.
Moody s and Standard Poor s both lowered their rating on the domestic merchandise retailer last month based on 9 STATES, MORE LOCATIONS COMING SOON
Moody s said operating performance is expected to weaken further over the course of 2022 as the company must clear excess inventory while continuing to contend with supply chain and inflation challenges. S&P said Bed, Bath Beyond's prospects for normalizing business trends have diminished in the second half of the year. Bed, Bath and Beyond didn't respond to a request for comment about the spike in its share price.