Bed Bath & Beyond loses more than 45% before the open - the end of the short squeeze?

19.08.2022 15:42|Conotoxia Ltd Analyst Team

Bed Bath & Beyond (BBBY) shares have gained 300% since the beginning of August after many previously opened short positions were closed. According to Seeking Alpha data, the short interest on BBBY currently stands at a whopping 41.9% (nearly half of the shares available for trading are sold short). At its peak, BBBY shares reached a price of $30. Today, however, they appear to be down almost 45% ahead of the market opening at 14:00 GMT+3 - this could be the company's worst day since its IPO in 1992.

BBBY shares were already down almost 20% yesterday, as investors began to realise potential gains. One of those investors is celebrity billionaire investor Ryan Cohen. He sold his shares, earning $68.1 million (56% on invested capital). According to a report filed with the SEC, Cohen's RC Ventures sold millions of shares on Tuesday and Wednesday in a price range of $18.68 to $29.21.

Since then, according to Bloomberg data, the activist investor has asked the company to consider selling the business, reached an agreement to add three independent directors to the board and pushed for the departure of CEO Mark Tritton. Shares also peaked in March 2022, when Cohen first disclosed a 9.8% stake in the company.

"The ailing retailer’s share price rise of late has defied logic," - said Danni Hewson, an analyst at AJ Bell. The company has hired the law firm, Kirkland & Ellis, to help it deal with its hard-to-manage debt, media reports said yesterday. Kirkland & Ellis is a well-known advisory firm that plans to help its client by raising new funds and refinancing debt.

Other so-called 'meme stocks' also fell on Friday before the open. GameStop (GME) lost 6.5% and AMC Entertainment Holdings (AMC) 4.7% at 14:00 GMT+3.


Rafał Tworkowski, Junior Market Analyst, Conotoxia Ltd. (Conotoxia investment service)

Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 82.59% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

Like the article?
Share it with friends!


See also:

Aug 19, 2022 1:46 pm

The crypto market falls as profits are realised

Aug 19, 2022 11:09 am

PPI inflation in Germany highest on record. Euro under pressure

Aug 18, 2022 4:07 pm

NetEase increases profits despite declining revenues

Aug 18, 2022 12:41 pm

Australian financial firm to launch 'spot' crypto ETFs

Aug 18, 2022 11:45 am

Highlights from the Fed minutes

Aug 17, 2022 12:37 pm

Michael Burry closed almost all his positions - what could another stock market crash mean for crypto?

76.23% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76.23% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Trading on CFDs is provided by Conotoxia Ltd. (CySEC no.336/17), which has the right to use the Conotoxia trademark.