Meme stocks were once again on the move on Wednesday. Despite a relatively quiet market as investors awaited news from the two-day Fed meeting, social media traders were already driving up prices for a number of different stocks. One of those included Bed Bath & Beyond (NASDAQ: BBY), which announced it would be partnering up with Kroger, as well as an update on its ambitious stock buyback program.
The retailer said that the deal would let Kroger sell a number of its home and baby products at various online and retail outlets, starting in 2022. At the same time, Bed Bath & Beyond said it plans to launch its own online platform as well, where it would include third-party brands that want to partner with the retailer.
However, perhaps more impressive is that management promised to complete its $1 billion stock buyback program by the end of February. That’s two years ahead of the original schedule. Around $400 million worth of stock remains for that target to be accomplished, an incredibly aggressive for a company with a market cap of just $1.9 billion.
When interviewed by CNBC, Bed Bath & Beyond’s CEO Mark Tritton said that he’s committed to the company’s share buyback program and that he won’t let higher share prices deter his plan.
“We’re not in it for the day by day, we’re in it for the long term,” said Tritton. “We’ve got a process to assess and evaluate really prudent spend to maximize shareholder value. Shares shooting up to $27.32? That’s a moment in time, not part of the overall plan to invest at those levels.”
Following yesterday’s surge of Avis Budget (NASDAQ: CAR), WallStreetBets and other trading forums jumped on the increased volatility to drive up the prices of meme stocks like GameStop (NYSE: GME) and AMC Entertainment (NYSE: AMC). This same excitement spilled over into other, tangentially related meme stocks, which included Bed Bath & Beyond. The company still has around 28.5% short interest, making it a common target for short sellers thinking the stock will plummet and a promising short squeeze candidate for social media traders.
Shares of BBY ended Wednesday up around 39.5%, with prices still going up in pre-market Thursday hours. Despite these gains, however, Bed Bath & Beyond has struggled over the past year. Despite a few big jumps, the stock has been steadily trending downwards, with current prices up just 7% since the year began. Most analysts remain cautious, if not bearish, on this retailer’s future prospects.
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
