Mattress Tub & Past shares soar greater than 80% in after-hours buying and selling

Shoppers exit a Bed Bath & Beyond store in New York.

Michael Nagel | Bloomberg | Getty Images

Bed bath in addition Shares rose more than 70% in extended trading Tuesday after the retailer released a spate of news releases.

News the company announced included the launch of a digital marketplace that will sell third-party goods in addition to working with a grocery chain Kroger. Bed Bath & Beyond also said it The share buyback program was ahead of schedule and resulted in some management changes.

But the sharp post-market surge was likely fueled by what was known as a short squeeze, which forced hedge funds that had bet against the stock to buy back their stocks and reduce their losses.

Bed Bath & Beyond was among the most heavily shorted stocks in the country, accounting for 27% of the stocks available for trading. That’s the third-highest among the 1,500 largest US stocks, according to FactSet.

There was also a huge surge in mentions on Reddit after the bell, according to Sentiment Tracker Swaggy stocks. Bed Bath & Beyond was a meme favorite earlier this year, joining people like GameStop and AMC entertainmentbefore falling out of favor as the retail movement lost some of its momentum.

Bed Bath & Beyond shares rose 9.6% to $ 16.75 during regular trading on Tuesday. Shares rose dramatically in high volume after-hours trading.

Seymour Asset Management founder Tim Seymour told CNBCs “Quick money“That Bed Bath & Beyond shares were driven by the interest of newer and non-traditional investors.

“There are a number of these broken companies out there finding ways to reinvent themselves,” he said, referring to the volatile stock trading based on Reddit messaging boards. “Whether some of these companies are [reinventing themselves] or not, the capital markets allow them to get there and find out later. And that was one of the big stories of 2021. “

What Bed Bath & Beyond announced

After years of poor sales growth, Bed Bath & Beyond seeks to revitalize its business under CEO Mark Tritton. He has tried to streamline his business, close underperforming stores, and introduce private label products in hopes of offering buyers products they can only find in his stores.

The company said Tuesday it would create a digital marketplace to build a bigger presence on the internet. It gave only a few more details about when the platform would launch and how exactly it would work.

“Marketplace is another example of how we are further redefining our business model,” Tritton said in a statement. “We are developing new ways for long-term profitable growth so that we can organically expand our existing expertise in the home and baby categories.”

Separately it said Kroger – the country’s largest supermarket chain – will begin selling some of Bed Bath and Beyond’s household and baby products on their website and in selected stores as part of a pilot project from 2022.

A Kroger spokeswoman said the number of deals will be announced at a later date, along with more details.

Bed Bath & Beyond has also named Anu Gupta as Chief Growth Officer, a newly created position. She was previously the Chief Strategy and Transformation Officer of Bed Bath & Beyond.

The company also brought on Rafeh Masood as Chief Customer Officer, another newly created position. Masood was previously Chief Digital Officer and Interim Chief Brand Officer of Bed Bath & Beyond.

Both appointments are effective immediately and will report to Tritton.

Bed Bath & Beyond also said that it is expected to a $ 1 billion share buyback plan by the end of the 2021 financial year, two years earlier than planned.

Positive developments

Neil Saunders, Managing Director of GlobalData Retail, said the Bed Bath announcements were positive developments.

“Anything to do with the terms ‘marketplace’ and ‘digital sales’ and the like tends to have a very positive effect on inflation,” he said. However, he added that the company has lagged behind its competitors and is struggling to refresh its brand.

Saunders also said household goods sales are poised to slow down after spiking during the pandemic. The sticker shock inflation inflation consumers are taking is likely to put further pressure on the category, as is the desire to get back to spending money on travel and restaurants.

“I can see why they are increasing. Why they are increasing this order of magnitude is a bit of a mystery,” he said. “But a lot of things about Wall Street and stock movements are a mystery. Sometimes it’s irrational movements.”