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.”

Mattress Bathtub and Past will get uncommon purchase ranking, however 2 merchants would not chunk

Bed bath and beyond can be out of reach.

Although the retailer received a rare buy rating this week from B. Riley, who initiated the name with a price target of $ 44 and an upbeat argument for its new management and cost-cutting strategies, the stock doesn’t look particularly attractive at its current levels, two said Dealer to CNBC “Trading nation” on Thursday.

The $ 3.5 billion company Profit and sales growth forecasts looks maybe better than those of its industry peers, but still lags behind the broader market, said Gina Sanchez, founder and CEO of Chantico Global, in an interview on Thursday.

“It’s really hard to get upset,” she said. “We think they’re the right price and that’s not necessarily a screaming buy.”

Bed Bath and Beyond has already risen 78% since the beginning of the year and is trading at a multiple of almost 20.5 times the forward price / earnings ratio.

The history of the stock as a Reddit favorite is also doing investors a disservice, Sanchez said.

“Once that momentum takes hold in the market, you’re pretty late because these momentum trades on some of these meme stocks have nothing to do with fundamentals,” she said. “If you buy it just for the momentum, that’s the worst reason to buy because you will inevitably be the bigger fool in this story.”

One possibility that could develop has to do with Bed Bath and Beyond’s brief interest, said Matt Maley, chief marketing strategist at Miller Tabak, in the same “Trading Nation” interview.

Both times this year the stock got swept up in Reddit trading – first when GameStop rallied in January and again when AMC skyrocketed in June – it had remarkably high short interest, Maley said.

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“Now it’s down again. If anything, it’s got incredibly low short interest, not a high one. So people have to be very, very careful,” warned Maley. “If we … get another short squeeze, Bed Bath and Beyond won’t be one of the stocks being squeezed like that.”

While the company’s recovery history may sound promising, it will likely take time for the stock to reflect, the strategist said.

“They’ve made some good changes and their revenue has been pretty good, but I just don’t think people should be looking for another rocket ship like we’ve seen twice this year,” he said hey.

Disclaimer of Liability

Mattress Tub & Past inventory surges 50% as turnaround plans pace forward

Shares in Bed bath in addition rose about 50% in trading Wednesday afternoon as a number of so-called meme stocks rallied.

The stock was in positive territory after the retailer announced it would launch three own brands this quarter, which was a key element of its turnaround strategy ahead of schedule. However, the stock continued to gain momentum, caught in a frenzy adding to the value of companies like AMC entertainment and blackberry also.

Bed Bath & Beyond’s shares are up nearly 120% this year, equating to a market value of more than $ 4.1 billion. Some of the gains were supported by retail investors placing speculative bets on a number of heavily short stocks.

The dealer tries to turn his performance around. It has left non-core stores, closed underperforming stores, and is using its own brands to attract shoppers with products that can only be bought at Bed Bath & Beyond. Private label brands are an important driver of sales aimwhere Mark Tritton, CEO of Bed Bath & Beyond, previously served as Chief Merchandising Officer.

Bed Bath & Beyond announced on Wednesday that it will have launched six new brands in the past five months – and one month earlier than expected. In particular, products will be in stores in time for the back-to-school shopping season, which is the second largest time for consumer spending after the Christmas break.

“What we are seeing is a transition phase where we are leaving legacy products … and preparing to introduce these new items,” Tritton said in an interview with CNBCs on Wednesday Courtney Reagan on “Screeching in the street. “He expects the majority of the new products to hit stores in the next few months.

Bed Bath & Beyond’s new brands include: Our Table, a range of kitchen and dining ware; Wild Sage, a home collection aimed at younger consumers with diverse tastes; and Squared Away, a line of storage, organization, and cleaning products.

Although there will be a transition period when the new products hit store shelves, Tritton expects shoppers who replenish their supplies to go back to college to see many of the new items.

“You will find six new brands of their own that have great prices, great quality and great style that they didn’t have last year,” said Tritton.