This week is off to a good start for Bed Bath & Beyond (NASDAQ:BBBY) stock. Unfortunately though, like all growth the struggling retailer has seen recently, the momentum won’t last. The troubled meme stock shot up by more than 30% this morning, but shares are already on their way back down.
As is clear from this pattern, BBBY stock has been driven up by continued hype from retail investors. On April 12, influential investor Ryan Cohen issued a cryptic tweet about “what was once a great American brand.” To the r/WallStreetBets crowd, this signaled that Cohen might be getting involved with Bed Bath & Beyond again.
Formerly hailed as the “meme stock king,” however, Cohen is also credited with tanking BBBY stock. When Cohen sold his entire stake in August 2022, shares plummeted. Bed Bath & Beyond hasn’t really recovered since.
What’s Happening With BBBY Stock?
The retail investor hype pushing BBBY stock up today is already running out. As of this writing, the stock is now up about 15% for the day, far lower than today’s high. This is a classic case of social media attention creating superficial growth. When the momentum inevitably runs out of steam, the stock in question comes crashing back down.
Cohen’s tweet isn’t the only thing that has gotten retail traders excited about BBBY recently. Per The Wall Street Journal, the company has flooded the market with new shares, even as the possibility of bankruptcy looms. There’s also the possibility of a reverse stock split, a move typically employed by struggling companies with no other options. As InvestorPlace contributor Thomas Niel notes, though, Bed Bath is spiraling, “reverse split or not.” It’s a lose/lose scenario for shareholders.
Even if Cohen is considering getting involved with the company, BBBY stock isn’t out of the woods. In just one more troubling development for the company, Fortune reports that the number of couples removing Bed Bath & Beyond items from their wedding registries is increasing.
All signs point toward an economic future that doesn’t include this troubled retailer. BBBY stock likely has further to fall.
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On the date of publication, Samuel O’Brient 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.
