Bed Bath & Beyond leads meme stock rally as retail punters pile in
2022.08.17 18:26
A person exits a Bed Bath & Beyond store in Manhattan, New York City, U.S., June 29, 2022. REUTERS/Andrew Kelly/File Photo
By Medha Singh
(Reuters) – Shares of Bed Bath & Beyond Inc (NASDAQ:BBBY) jumped 26% on Wednesday, leading a surge in meme stocks again as individual investors continued to dabble in highly shorted shares.
Bed Bath & Beyond has gained in 14 out of the past 15 sessions, helping the home goods company’s market value more than quadruple to over $2 billion. The stock was last trading at $25.93 after rising up to $30 earlier in the session.
“It truly is a quality company (but) shares are probably overvalued in the low teens and it is ridiculously overvalued at high $20s,” said Jake Dollarhide, chief executive officer at Longbow Asset Management in Tulsa, Oklahoma.
Retail investors net bought $73.2 million worth of the company’s shares on Tuesday, the highest single-day purchase in at least five years, according to Vanda (NASDAQ:VNDA) Research’s retail trade flows data, as a filing showing activist investor Ryan Cohen’s long-term call option purchases enthused retail punters.
Bed Bath & Beyond was the most actively traded single stock option on Wednesday, far ahead of popular options trades including Apple Inc (NASDAQ:AAPL) and Tesla (NASDAQ:TSLA) Inc, data from Options Clearing Corp showed.
The resurgence in retail trading comes after a rebound in U.S. stocks that helped the S&P 500 recoup more than half of the benchmark’s losses since its June low.
Among others, e-commerce firm Vinco Ventures advanced 36% and meal-kit delivery firm Blue Apron rose 11.5%.
About 51% of Bed Bath & Beyond’s free float shares are shorted, while Vinco Ventures and Blue Apron have 17% and 37% of their public shares under short position respectively, according to Ortex.
“You are only seeing meme stocks come back because the stock market has rebounded. A rising stock market lifts all boats,” Dollarhide said.
