BBBY Stock (NASDAQ:BBBY)
Individual investors pushed Bed Bath & Beyond (NASDAQ:BBBY) stock higher on Wednesday, extending the firm’s recovery from multi-decade lows struck last week and sparking a rise in other similar companies.
At $3.13, BBBY stock was up about 50% and was the third most frequently traded stock on U.S. exchanges, behind only Tesla (NASDAQ:TSLA) Inc and Amazon (NASDAQ:AMZN). Up by almost 140% this week alone.
GameStop (NYSE:GME) and AMC Entertainment (NYSE:AMC) also saw gains, with GME up 5% and AMC up 15%, among the most popular retail investors.
After posting a larger-than-expected quarterly deficit, Bed Bath & Beyond said on Tuesday that it would be laying off additional staff to save money.
After the ailing U.S. home goods firm declared its intention to investigate alternatives, including bankruptcy, the stock price dropped to its lowest level since the early 1990s last week.
According to research company S3 Partners, Bed Bath & Beyond has $82.7 million in short interest or 52.07% of its free float.
According to S3 Partners, the company is poised for turbulent trading based on momentum rather than fundamentals since there are more individual investors on the long side and big institutional activity on the short side.
According to Ihor Dusaniwsky, managing director of predictive analytics at S3 Partners, “if bankruptcy is not in BBBY’s future, its surging stock price would push short sellers to rush to the doors to keep part of the mark-to-market gains they gained in 2022.”
According to Trade Alert statistics, based on recent activity, Bed Bath & Beyond’s option volume was nine times higher than normal.
Seventy percent of the volume was comprised of options having expiration dates on or before January 20. The company’s 30-day implied volatility, a measure of how much traders anticipate the stock to fluctuate in the near future, was at 330%, around the most in at least four years, according to data compiled by Trade Alert.
Nearly two years ago, retail punters drove up BBBY stock price by bidding on internet discussion boards in unison, causing billions in losses for pessimistic hedge funds.
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