Meme stock Bed Bath & Beyond Jumped 70% yesterday (Tuesday) during trading, reaching a price of $28.04 and a record of almost five months. The stock jumped about 316% during the last month, and the attack on it led to severe damage to investors who sold the stock short (short), and to the phenomenon called “short squeeze”, in which the stock jumps due to the desire of the short sellers to quickly close their losing position.
As of yesterday, about 50% of the company’s shares are in a short position. According to the analysis company Ortex, the increase in value led to signs of a short squeeze. The store chain’s shares were the most traded on the Fidelity brokerage platform, indicating strong interest from independent investors.
According to a report to the Real Estate Authority of AIsrael, the venture capital fund of Gamestop chairman Ryan KaN purchased call options for more than 1.6 million shares of the company, which are far out of the money at prices of $60 to $80. Now, in premarket trading, Bed Bath & Beyond shares are climbing more than 19%.
“Big Bad Hedge Funds vs. Big Bad Hedge Funds”
Trade analyst Jared Dilian wrote last week that it appears that the trading frenzy in the company’s shares is likely driven more by hedge funds than by retail investors, since many of the retail investors have run out of the stimulus money that was distributed during the Corona period, and have no money left to invest.
According to Dillian, “Mem stock trading today isn’t really a ‘wallstreetbets’ forum on Reddit vs. Big Bad Hedge Funds, it’s Big Bad Hedge Funds vs. Big Bad Hedge Funds. Reddit users who are still around are just there for the ‘ride’.”
The sharp increase in the share price came despite warnings from several analysts that there is a liquidity problem at the company, which is struggling to maintain the trust of its suppliers and investors after its private label was not well received by customers.
Investors’ enthusiasm is not limited to Bed Bath & Beyond – according to the topstonks website, the number of comments on the WallstreetBets forum about the Fubotv company jumped by 338%, and the number of comments dealing with the Party City company increased by about 15%.