Shares of Bed Bath & Beyond (BBBY) rose 92% in a single trading session as retail investors continue to execute a short squeeze on the troubled retailer.
About 240 million shares of Bed Bath & Beyond were traded on February 6, which is more than three times the average amount of stock that changes hands in a typical month. Trading in the stock was stopped twice during the session due to extreme volatility.
Bed Bath & Beyond’s stock has been trading erratically since executives at the company warned that they are preparing for a potential bankruptcy filing and missed several debt payments in recent weeks.
Year-to-date, Bed Bath & Beyond’s stock has risen more than 150%.
Other so called “meme stocks” that were popular with retail investors during the pandemic have also risen in recent weeks.
Shares of movie theatre chain AMC Entertainment (AMC) rose 12% and video game retailer GameStop’s (GME) share price increased 7.2% on February 6.
More than one-fifth of Bed Bath & Beyond’s shares are currently sold short, resulting in short coverings, or a short squeeze, which is when traders close out their negative bets as the share price rises.
Bed Bath & Beyond has yet to formally file for bankruptcy, though the company’s management team has warned that they are running out of money.
