Key Points

  • "Relief rally" being attributed to investors' hope for a path forward for the company.
  • Restructuring may be required which may limit upside or even vaporize equity value.
  • CEO Sue Gove announced workforce reductions and cost-saving measures such as store closings.
  • Despite the recent surge, the risk of bankruptcy remains and the stock is still down 60% over the last 6 months.

Image Description

Bed Bath & Beyond, the struggling home goods retailer, saw a surge in their stock prices on Wednesday. Following a 27.78% rally on Tuesday, shares jumped 28.50% in the premarket session to reach $2.67.

This rise in stock prices is being attributed to a relief rally, as investors are hopeful that the company is looking for a path forward and that imminent bankruptcy concerns may have been overdone. However, some analysts believe that some type of restructuring is likely required and this may limit upside or even vaporize equity value.

In their recent earnings report, CEO Sue Gove announced that the company will be reducing their workforce "across our corporate, supply chain and store portfolio." Bed Bath & Beyond also outlined plans to close stores and implement other cost-saving measures. These actions were taken after the company's sales have crumbled in recent times.

Shares of Bed Bath & Beyond were among the most traded stocks on Fidelity's retail platform on Tuesday, and the stock has risen 60% so far this week. It is still down 60% over the last 6 months and the risk of bankruptcy remains a concern for the company.

The company's shares were also among the top three most traded stocks on Fidelity's retail platform on Tuesday. Additionally, 38.6% of Bed Bath & Beyond's shares were under short position, per Ortex data as of Monday.

It should also be noted that nearly two years ago, retail investors bid up Bed Bath & Beyond's shares by banding together on online forums, costing bearish hedge funds billions of dollars. This led to a temporary surge in prices, as shares surged as much as $53.90 at the height of the so-called "meme stock" frenzy in 2020. But since then, the shares have plunged about 96% from that level and lost 83% last year alone.

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  • Ticker BBBY
  • Exchange NASDAQ
  • Sector Consumer Cyclical
  • Industry Specialty Retail
  • Shares Outstandng 80,253,000
  • Description
  • Bed Bath & Beyond Inc., together with its subsidiaries, operates a chain of retail stores. It sells a range of domestics merchandise, including bed linens and related items, bath items, and kitchen textiles; and home furnishings, such as kitchen and tabletop items, fine tabletop, basic housewares, general home furnishings, consumables, and v...
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