It’s Build-A-Bear Workshop (NYSE:BBW) not Build-A-Bull but you wouldn’t know that looking at the run-up in BBW stock yesterday and this morning in pre-market trading. After clocking a 42% gain on Wednesday, the shares surged another 18% ahead of Thursday’s market open.
What’s behind the move? It’s certainly not anything fundamental about the bear-building business. In case you’re not familiar with the company, it operates mall-based stores where frenzied children get to, well, build their own bear or other plush toy, such as a Baby Yoda. In case you missed it, much of America’s mall and non-essential retail has been curtailed during the novel coronavirus pandemic. In fact, Build-A-Bear reduced operations by 25% in the three months ending Oct. 31.
More likely, the surge is the work of novice retail day traders who are chatting up BBW stock on Reddit discussion boards. Over on Reddit r/WallStreetBets (WSB), investors are taking positions in stocks targeted by short-sellers. This has them rocketing these stocks higher, which is resulting in losses for the short-sellers. It is resulting in massive gains for WSB.
However, as Bloomberg pointed out earlier today, there’s little short interest around BBW stock. According to the report, it’s possible traders have mixed up the BBW ticker with BBBY, as in Bed Bath & Beyond (NASDAQ:BBBY), after those shares surged 44% yesterday. Short interest in the home furnishing retailer stood at 65.5% of its float as of Jan. 15.
Who knows.
On the date of publication, Robert Lakin did not have (either directly or indirectly) any positions in the securities mentioned in this article.
InvestorPlace contributor Robert Lakin is a veteran financial writer and editor, following fintech, agtech and property tech startups.
