Meme stocks have been flying under the radar in recent weeks amidst everything else going on in the world. While Monday’s top-performing companies were mostly energy stocks, investors were surprised when Bed Bath & Beyond (NYSE: BBY) skyrocketed as much as 86% over the course of the day. As it turns out, a famous meme stock backer had decided to buy up a stake in the struggling retailer.
Bed Bath & Beyond announced that Chewy (NYSE: CHWY) co-founder and GameStop (NYSE: GME) chairman Ryan Cohen officially bought up a large stake in the company. Cohen, whose name became famous as a backer of popular meme stocks, bought up a 9.8% stake in the struggling retailer, encouraging the company to explore strategic alternatives.
The news came as Bed Bath & Beyond has continued struggling over the past years. Compared to March 2021, shares are down over 48%, whereas the S&P 500 was up over 16.5% over that same period. While some social media traders tried to push Bed Bad & Beyond as a kind of meme stock, the retailer never really saw the same investor excitement surrounding its stock compared to other meme stocks, like GameStop.
However, Bed Bath & Beyond did end up skyrocketing thanks to another piece of news as well. Shortly after the Cohen investment, management said that it’s willing to consider potentially selling the business and going private.
“Bed Bath & Beyond’s Board and management team maintain a consistent dialogue with our shareholders and, while we have had no prior contact with RC Ventures, we will carefully review their letter and hope to engage constructively around the ideas they have put forth,” read an update from the company.
Activist shareholders have been championing BBY to go private for a while now already, especially considering its struggling business. While some retailers, like Walmart and Target, have continued to do well in recent quarters, many more middle-sized retailers like Bed Bath & Beyond have struggled not just over the past few months, but over the past couple of years going back to when the pandemic first began as well.
Shares of BBY were up over 86% at one point, although they have now settled down to a more modest 34.2% gain. Although its market cap has steadily plummeted over the past 12 months, average investors seem less bearish than they used to be. Short interest has fallen to 26%, compared to the 60% seen back last year. At the moment, more analysts are neutral on the retailer than bullish or bearish.
Bed Bath & Beyond Company Profile
Bed Bath & Beyond is a home furnishings retailer, operating around 1,000 stores in all 50 states, Puerto Rico, Canada, and Mexico. Stores carry an assortment of branded bed and bath accessories, kitchen textiles, and cooking supplies. In addition to 813 Bed Bath & Beyond stores, the company operates 132 Buy Buy Baby stores and 54 Harmon Face Values stores (health/beauty care). In an effort to refocus on its core businesses, the firm has divested the online retailer Personalizationmall.com, the One Kings Lane business and Christmas Tree Shops and That (gifts/housewares), Linen Holdings, and Cost Plus World Market. – Warrior Trading News