Bed Bath & Beyond investors got a jolt Wednesday. Its shares jumped by more than half at the market open as retail investors piled into the stock.
Sparking interest in the shares: the retailer said Tuesday it’ll speed up its share buyback program, and it’ll team up with supermarket operator Kroger to bring its line of home and baby products to the grocer’s website.
The sudden rally in Bed Bath shares reignited interest in other heavily shorted so-called “meme” stocks that are popular among the Reddit message board crowd such as GameStop and AMC Entertainment but are shunned by Wall Street professionals.
So-called short sellers’ make money when the stock that they bet against declines. The surge in Bed Bath shares makes them ripe for a “squeeze,” whereby investors betting against the company are forced to unwind their exposure to curb losses.
Many short sellers lost billions of dollars earlier this year when retail investors fueled eye-popping rallies in certain popular meme stocks…AMC shares are up more than 1900% this year, GameStop more than 1100% despite the bets big investors had placed against them.