Bed Bath & Beyond Surges as Meme Rally Sweeps Up Carvana, AMC
Bed Bath & Beyond Inc. soared Wednesday, more than wiping out a 46% drop last week and sparking a rally in other so-called meme stocks.
Shares in the home-goods retailer climbed 69% in a record advance to $3.49, erasing the share-price slump that followed the company’s warning on Jan. 5 that it may need to file for bankruptcy. Its share rose 24% on Monday and 28% on Tuesday, even after Bed Bath & Beyond reported a wider net loss than expected, which underlined the likelihood of a bankruptcy filing soon. More than 225 million shares changed hands on Wednesday, about 12-times the average for the past month.
Other retail-trader favorites were also on the rise Wednesday, with AMC Entertainment Holdings Inc. gaining 21% and GameStop Corp. advancing 7.1%. Carvana Co. jumped 24% while Arrival SA gained 8.7%. Investors have been snapping up shares of beaten-down stocks to start the year with a Bloomberg-compiled basket of meme stocks up 10% in 2023. Bed Bath & Beyond added to gains in extended trading, rising 15%.
Retail traders have been steady buyers of Bed Bath & Beyond since the warning of a potential bankruptcy last week. All told, the group has snapped up $6 million of shares since the markets close on Jan. 4, adding to the $601 million they’ve piled in since the meme stock mania began two years ago, Vanda Research data show. While their support has been steady, it pales in comparison to purchases of stocks like Tesla Inc. and Apple Inc.
The retail-trading crowd dashed in and out of the stock Wednesday with Bed Bath & Beyond among the most traded assets on Fidelity’s platform. It was the second-most bought stock by the firm’s customers, lagging only Tesla, however buy orders modestly outpaced those to sell. Short interest in the stock has been rising and stands at about 52% of float, up from 47% a month ago, data from analytics firm S3 Partners show.