Bed, Bath & Beyond is booming in the meme stock rally

NEW YORK, Jan. 9 (Reuters) – Shares of Bid, Bath & Beyond Inc (BBBY.O) It rebounded sharply in high volume trading on Monday amid speculation by retail investors that the struggling home goods seller could be a potential takeover target.

Shares of the company were last up 35% at $1.77, on track for the biggest one-day percentage increase since Aug. 8.

As of midday, traders had traded $114 million worth of Bed, Bath & Beyond stock, which approximates the company’s entire market value of $157 million in shares, according to Refinitiv data.

Online retail stock forums, including Reddit, have been buzzing about a potential M&A deal, setting off a buying frenzy reminiscent of the 2020 “meme stock” phenomenon of struggling stocks like GameStop Corp. (GME.N) and AMC Entertainment Holdings (AMC.N) It rose amid the viral interest in forums like WallStreetBets.

Bed, Bath & Beyond stock lost nearly half its value last Thursday and Friday after the company warned that it may not be able to continue as a going concern and may have to seek relief through bankruptcy.

Reuters also reported Thursday that the company is preparing to file for bankruptcy protection in the coming weeks.

Bed Bath & Beyond has struggled for years with shrinking sales as it competes with Amazon (AMZN.O) and other competitors, where investors cite problems that include crowded stores and an overreliance on discount coupons. Its shares are down 83% in 2022.

In a report last week, Bed Bath & Beyond said it expected to show a net loss of $385.8 million in the fiscal quarter ending in November, including $100 million in impairment charges. The company is scheduled to report its results early on Tuesday.

Of the 13 analysts covering the company’s business, three have recommended “hold,” 8 have “sell” stock values, and two have “strong sell” recommendations. The average price target is $2, down from $3 a month ago.

(Reporting by Stephen Kolb) in New York. Additional reporting by Noel Randywich in Oakland, California. Editing by Allison Williams

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