Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Meme stock Bed Bath & Beyond soars after investor Ryan Cohen's latest bets

Published 2022-08-16, 12:52 p/m
Updated 2022-08-16, 02:44 p/m
© Reuters. FILE PHOTO: Signage is seen at a Bed Bath & Beyond store in Manhattan, New York City, U.S., June 29, 2022. REUTERS/Andrew Kelly/File Photo

© Reuters. FILE PHOTO: Signage is seen at a Bed Bath & Beyond store in Manhattan, New York City, U.S., June 29, 2022. REUTERS/Andrew Kelly/File Photo

By Medha Singh and Bansari Mayur Kamdar

(Reuters) -Shares of Bed Bath & Beyond Inc (NASDAQ:BBBY) surged 60% to a near five-month high in volatile trading on Tuesday, as retail investors flocked to the stock after a filing revealed activist investor Ryan Cohen's latest bet on the home goods retailer.

The stock rose as much as 78.8% to $28.60 during the session and trading was halted multiple times for volatility.

Cohen's investment vehicle RC Ventures, which is the second largest investor in the company and has added three independent directors to its board, bought call options expiring in January 2023 on 1.67 million shares with a strike price ranging from $60 to $80.

An option gives the buyer the right to buy or sell a security at a given price on a given date. Buying a call option is essentially betting the underlying asset will rise in price.

"You see his name (Cohen) associated and it gets the buzz going. So right now social media buzz is flying around Bed Bath and Beyond and it is spilling over other stocks as well," said Dennis Dick, retail trader at Triple D Trading.

The home furnishing company's shares were the most traded on brokerage Fidelity's platform, indicating interest from retail investors.

About 300 million shares changed hands by 2:30 p.m. ET, far outpacing the stock's 30-day moving average volume of nearly 29 million.

Trading in Bed Bath & Beyond, which has 50.7% of its public free float in short position, has triggered a short squeeze signal, according to analytics firm Ortex.

The stock is up 440% so far this month in a rally that is evocative of eye-watering gains in shares of GameStop (NYSE:GME) and AMC Entertainment early last year that hurt hedge funds that had bet against the stock.

© Reuters. FILE PHOTO: Signage is seen at a Bed Bath & Beyond store in Manhattan, New York City, U.S., June 29, 2022. REUTERS/Andrew Kelly/File Photo

Other highly shorted stocks, meal-kit delivery firm Blue Apron, sports TV streaming co FuboTV (NYSE:FUBO), GameStop and barbecue grill maker Weber Inc jumped between 8% and 53%.

Bed Bath & Beyond opened lower on Tuesday after B. Riley downgraded the stock to "sell", saying the shares were trading at "unrealistic valuations."

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.