Wall Street likely thought it had seen the last of Bed Bath & Beyond (OTCMKTS:BBBYQ) stock. Last month, the home furnishing retailer’s troubles culminated in its filing for bankruptcy and delisting from the Nasdaq. This came after a year of closing stores and struggling to keep share prices from tanking completely. Despite attention from retail investors, the troubled company could not be saved by meme stock hype.
After delisting, it returned to markets trading over-the-counter (OTC), a clear indication that the company had no chance of returning to its former glory. BBBYQ stock hasn’t made much progress since it began trading. But as it turns out, some investors still haven’t given up on it, no matter how much they should.
What’s Happening With BBBYQ Stock
Trading OTC hasn’t helped Bed Bath & Beyond. While BBBYQ stock is rising today, it still trades at dangerously low levels, remaining well below $1 per share. As of this writing, it is down almost 10% for the week and almost 40% for the month. Trading for pennies on the dollar is expected for a company that has fallen so far. However, the case of Bed Bath & Beyond seems particularly bleak, particularly as the company has stated that it expects shares to ultimately be worthless.
There doesn’t seem to be any reason for investors to be betting on BBBYQ stock. As The Wall Street Journal reports, though, some investors are refusing to turn their backs on it. Unsurprisingly, it is the r/WallStreetBets crowd that is still banking on a potential turnaround. As the outlet reports:
“Investors in meme stocks are typically eternal optimists, wagering on stocks they are excited about even if the underlying fundamentals are weak. Even in that world, the Bed Bath & Beyond bet is extreme. The company has said it expects shareholders will be wiped out, a projection that emphasizes the hard math of its chapter 11 filing.”
The WSJ spoke to multiple retail traders who remain convinced that “anything can happen” with a meme stock like BBBYQ. While that’s technically correct, it doesn’t make the company a good buy. It shouldn’t be overlooked that Bed Bath & Beyond’s leadership has made it clear that it only sees worse days ahead for shareholders. If the people running a company are advising investors not to buy shares, it might be advisable to listen.
Meme stock investors are often banking on the possibility of another short squeeze, like the one they saw from GameStop (NYSE:GME) in 2021. But after Bed Bath & Beyond tanked in August 2022 after activist investor Ryan Cohen sold out, there’s little chance that a squeeze will happen. As InvestorPlace‘s Eddie Pan reports, the cost to borrow BBBYQ stock fell after last month’s bankruptcy filing.
Why It Matters
Pan advised both bullish and bearish investors to avoid Bed Bath & Beyond as the Nasdaq handed the troubled company a delisting notice. That advice still holds up as BBBYQ stock continuously fails to garner momentum while trading OTC. Even the most speculative traders should recognize that this is one meme stock that hasn’t rallied because it can’t. The company knows its days are numbered and hasn’t tried to hide it.
It’s time for everyone who can’t see the bigger picture to take a hard look at Bed Bath & Beyond’s questionable fundamentals. At this point, Mullen Automotive (NASDAQ:MULN) has a better chance of mounting a comeback in 2023.
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On the date of publication, Samuel O’Brient did not have (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.
