On Tuesday, shares of Bed Bath & Beyond (NASDAQ:BBBY) went up by almost 30%. This was part of a trend for meme stocks to go up. Since the end of July, the stock price has gone up by more than 300%.
At one point during the session, Bed Bath & Beyond (NASDAQ:BBBY) was up nearly 79% for the day. Volatility trading was also stopped because of all the commotion. The stock kept getting attention from traders who wanted to get out of short squeezes.
The stock ended up at $20.65, which was far below its high for the day but still a 29% gain from Monday’s close. As recently as July 28, the price of a share was less than $5.
On Tuesday, nearly 387 million shares were traded, which is a lot more than the average daily volume of about 18 million.
On Tuesday, Susan Anderson, an analyst at B. Riley Financial, gave the stock a Sell rating because of how quickly it went up.
Retail traders on the Wall Street Bets Reddit forum, which became famous during the GameStop scandal in January 2021, are paying attention to Bed Bath & Beyond (NASDAQ:BBBY) again, she told clients. It is also believed that Bed Bath & Beyond (NASDAQ:BBBY) is trading at prices that are too high.”
Short-sellers have been hit hard by the stock’s rise so far.
Ihor Dusaniwsky, head of predictive analytics at S3 Partners, told SeekingAlpha that short sellers have been very active in Bed Bath & Beyond (NASDAQ:BBBY), even though this has not been a profitable trade in the long or short term. A lot of the short selling has happened in the last thirty days. In that time, 5.04 million shares worth $81 million have been sold short. This is a 17.7% increase in the total number of shares sold short as the stock price rose by 223%. Shorts seem to want this recent sharp rally to slow down at some point.
Short-sellers have lost a shocking $560 million on their bets against the struggling retailer so far this year. This is a sharp change from the positive trend before August’s rally. In fact, the data from the data and predictive analytics firm shows that Tuesday’s losses alone have reached more than $300 million.
But Bed Bath & Beyond (NASDAQ:BBBY) was not the only heavily shorted stock that went up on Tuesday. Party City Holdco Inc. (NYSE:PRTY) +23.72%, Blue Apron Holdings Inc. (NYSE:APRN) +31.25%, Express, Inc. (NYSE:EXPR) +13.22%, Newegg Commerce Inc. (NASDAQ:NEGG) +6.85%, Global-E Online Ltd. (NASDAQ:GLBE), and Torrid Holdings Inc. (NYSE:CURV) +11.73% were all big winners on the day.
GameStop (GME) also went up a lot, and in the middle of trading, it had gone up 11.12%.
The stock’s strong performance in 2022 has also hurt those who bet against the video game store. According to S3 Partners, short sellers have lost $781 million in mark-to-market losses so far this year. Most of these losses also happened in August.
Dusaniwsky told SeekingAlpha, “GME is a very popular short and a very squeezable stock (100.00/100.00 Squeeze Score).” “It is a good candidate for a squeeze because it has a lot of short interest, a high SI% float, a tight stock borrow market with fees over 30%, and big mark-to-market losses in the past few months. If GME’s stock price keeps going up, short-side buy-to-covers should hit the market and push up the price of its stock.”
Featured Image: Megapixl @Beruldsen
