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Bed Bath & Beyond’s BBBY stock skyrocketed more than 50% on Thursday, closing at $5.24, as retail traders pile back into the popular meme stock.
The stock has also seen an increase in short interest throughout the last few months as speculation about the company’s ability to survive rises.
Recent Bed Bath & Beyond News: Bed Bath & Beyond announced on Tuesday that it will be closing more stores in 2023 as part of a restructuring process to save money. The company also said that it will consider filing for bankruptcy protection.
Third-quarter net sales declined 33% to $1.26 billion over the prior year on $393 million in losses, according to Benzinga Pro.
Bed Bath & Beyond’s struggles are not new: the company has lagged behind competitors in online and e-commerce sales for years.
Seeing the stock skyrocket on potential bankruptcy news and poor earnings may seem counterintuitive, but is not unprecedented. Sometimes companies that are on their way out of business see an increase in buying activity among speculative investors. Even the FTX Token FTT/USD saw a huge rally after the coin’s parent company imploded.
Retail Stock Moves: Other popular stocks among retail investors like Gamestop Corp GME and Carvana Co CVNA also moved significantly higher Thursday. A “short squeeze” is when a stock that has a lot of short interest rapidly increases in price as shorts are forced to cover, causing even more buying and more short covering.
The Last Word: Two weeks ago, Bed Bath and Beyond’s stock was at $2.30. Since then, the company announced poor earnings, more store closings and confirmed that bankruptcy is a possibility. The stock closed higher than $5 Thursday.
Photo via Shutterstock.
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Image and article originally from www.benzinga.com. Read the original article here.