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Bed Bath & Beyond Stock: Can Its Trip ‘To The Moon’ Continue?

The days of Bed Bath & Beyond being a meme stock are not over. Thanks to a series of developments announced after the close on Nov 2, Reddit traders jumped back into BBBY stock with full force.

If you previously said the days of Bed Bath & Beyond  (BBBY) - Get Bed Bath & Beyond Inc. Report being a meme stock were over, you spoke too soon. Thanks to a series of developments announced after the close on Nov 2, Reddit traders jumped back into BBBY stock with full force.

Bolting more than 35% at the open Nov 3, its post-news short squeeze cooled a bit, until getting another jolt on Nov 5, after Citron Research argued that it had substantial upside. However, not everyone is singing the praises of the home furnishings retailer.

Many on the sell-side community believe the excitement generated by recent news is overblown, and that the company remains at risk of falling short of outlook when it next announces quarterly results. As the market absorbs this more critical take on the company, shares are pulling back, from around $22.50 per share, to around $21 per share as of this writing.

Figure 1: Signage is displayed outside of a Bed Bath & Beyond Inc. store in Los Angeles, California, U.S.

Figure 1: Signage is displayed outside of a Bed Bath & Beyond Inc. store in Los Angeles, California, U.S.

So, is the squeeze over, with shares falling back to prior levels? Or, is there a chance for this meme wave to continue? It may all come down to the Reddit set’s most current enthusiasm for it.

BBBY Stock and its Three Big Developments

Last week, three simultaneous announcements helped to fuel “to the moon” moves for Bed Bath & Beyond for the third time this year.

First and second, a pair of announcements for its underlying operations: the launch of a marketplace featuring third party vendors, plus a planned partnership with grocery chain Kroger KR. Third, news of the company speeding up its stock buyback plans.

Of the developments, the buyback update was the one that likely sparked much of its surge. Convincing the meme crowd to dive back in, plus compelling the short side (27.4% of its float has been sold short) to cover their positions, it makes sense for such a big “to the moon” move higher.

Again though, not everyone has seen the latest news with this company as cause for celebration. Their less enthusiastic view is starting to weigh on the stock.

After the Latest Meme Wave, What’s Next for Shares?

It wasn’t long before the sell-side community provided their less enthusiastic view on BBBY stock following the above-mentioned developments that helped spark the short-squeeze.

Analysts from UBS, Wedbush and Wells Fargo are skeptical whether its e-commerce platform or its Kroger partnership will be successful. Much less be something that outweighs concerns that Bed Bath and Beyond will deliver underwhelming results this holiday season.

Investors seem to be coming to this conclusion as well, as seen from its slide following the dissemination of the analyst community’s take in recent days. More importantly, with discussion on r/WallStreetBets quickly dropping as well, this latest meme wave may be finishing up almost as soon as it started.

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(Disclaimers: this is not investment advice. The author may be long one or more stocks mentioned in this report. Also, the article may contain affiliate links. These partnerships do not influence editorial content. Thanks for supporting Wall Street Memes)