CM – Bed bath & Beyond Stock up 59% on Likely Short Squeeze

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Bed bath & Beyond

The stock rose up to 80% in after-hours trading on Tuesday to $ 30 a share after the homeware retailer announced a series of moves that likely caused what was known as a short squeeze.

Bed bath & Beyond

(Ticker: BBBY) announced a partnership with a grocery chain

Kroger

(KR) on Tuesday, noting that some of its home and baby products will be available in a variety of different

Kroger

in stores and online from next year. The company also announced the launch of its new digital marketplace selling third-party brands.

Bed Bath & Beyond has also completed $ 600 million in share buybacks since the end of fiscal 2020 and is now expecting to Buy back an additional $ 400 million in late 2021 – two years ahead of schedule. The company had a total market cap of $ 1.7 billion as of Tuesday’s close of trading. The massive buyback program underscores the company’s confidence in the turnaround, says CEO Mark Tritton.

Bed Bath & Beyond shares have lost nearly 80% in value since their most recent high in 2015. The retailer’s sales in the same store have continued to decline since 2015, with a particularly sharp drop in the past two years due to Covid-19 disruptions. Earnings per share even slipped into negative territory in the May quarter of 2020.

The homeware retailer has reversed the trend in recent months, introducing a number of private labels, but rising inflation, supply chain disruptions and the delta variant presented some new challenges. When the retailer released its latest quarterly results in September, sales were down 26% year over year and earnings were down a whopping 92%.

The stock is one of the most heavily shorted stocks as hedge funds bet the stocks would keep falling. According to FactSet data, about 27% of publicly traded stocks were sold short on Tuesday, the third highest among the 1,500 largest US public companies. In January, the rate was as high as 64%.

Since 2021, the shares of Bed Bath & Beyond have seen some sharp jumps as retailers on Reddit forums changed the price of stocks that Wall Street disliked up, forcing hedge funds to cover their short positions. They did the same thing with meme stocks like

GameStop

(GME) and

AMC Entertainment Holdings

(AMC). But the retailer’s stock has fallen out of favor since June as the meme crowd turned to other goals.

Bed Bath & Beyond also appointed two new executives: Anu Gupta as Chief Growth Officer and Rafeh Masood as Chief Customer Officer.

Bed Bath & Beyond shares rose 59% in pre-hours trading to $ 26.60 at 7:39 am.

Bed Bath & Beyond shares rose as much as 80 in after-hours trading on Tuesday % to $ 30 per share after the homeware retailer announced a series of moves that likely caused what is known as a short squeeze.

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