This meme stock rally may have more room to run, considering today’s price action across a range of high-profile meme stocks. At the time of this writing, Bed Bath & Beyond (NASDAQ:BBBY) stock in particular is appreciating 60%. In fact, at today’s highs, BBBY stock actually soared more than 75%. This incredible move comes as retail investors digest an intriguing move from GameStop (NYSE:GME) chairman Ryan Cohen.
Cohen just loaded up on Bed Bath & Beyond call options. Via a regulatory filing yesterday, Ryan Cohen’s RC Ventures made a big bet on BBBY stock hitting very high price targets. These targets range from the $60 to $80 level, meaning Cohen could lose the entirety of his bet if shares fail to trade at these levels by the January 2023 expiry.
Cohen’s bet isn’t insignificant, with the call options placed at very out-of-the-money levels. Today’s surge has certainly propelled the value of Cohen’s bet higher, too, although it’s unclear whether he intends to hold the options to expiry or not.
Let’s dive into what investors should make of this intriguing BBBY stock bet.
BBBY Stock Soars on Retail Investor Interest
The interesting thing about the recent surge in BBBY stock is that most of the gains have occurred in August. The 13-F filing that was released was for positions entered into before July 31. Accordingly, Ryan Cohen appears to have made this bet before it was popular to do so.
This fact appears to have encouraged retail investors to continue to double down, with call options flying for Bed Bath & Beyond. Still a troubled retailer, investors looking for outsized short-term gains appear to be far outnumbering fundamentals-oriented investors. As such, it will be interesting to see how long this move can last.
Short interest remains high in BBBY stock — and it will likely remain high if the stock stays detached from fundamentals. That said, near-term short covering can potentially lead to a short squeeze, which is what investors are after.
It’s unclear how long Ryan Cohen will hold onto this speculative bet. However, he has been right on other short squeezes in the past. Accordingly, retail investors seem to be taking the bet as a sign more upside is on the horizon. If anything, Bed Bath & Beyond will be a fun stock to watch from here.
On the date of publication, Chris MacDonald did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.