Meme-stocks favorite Bed, Bath & Beyond was back on the march Tuesday ahead of the retailer’s turnaround strategy update later in the week.
Bed, Bath & Beyond (BBBY) – Get Bed Bath & Beyond Inc. Report shares extended gains Tuesday as the market’s favorite meme stock found footing with retail investors ahead of its turnaround update later in the week.
The struggling home goods retailer, which reportedly secured around $375 million in loan financing last week, will update investors on its turnaround plans Wednesday, with a focus on both it near-term financing needs and any potential sale of its lucrative buybuy Baby division.
The stock’s trajectory was disrupted last week, as well, by the sale of 9.45 million by activist investor Ryan Cohen, who dumped his entire stake in the group, netting around $60 million from the retail-powered rally.
Just five months ago, Cohen pressed the retailer to look at several strategic alternatives, including sale of its lucrative buybuy Baby division, and pushed or the ouster of CEO Mark Tritton, who left the group in June.
Bed, Bath & Beyond shares, which surged 24% on Monday, were marked 13.33% higher in pre-market trading to indicate an opening bell price of $15.14 each.
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Despite the recent surge, which has lifted shares in the group by around 155% over the past month, recent data from S3 Partners suggests short interest comprises around 55% of the outstanding shares of Bed, Bath & Beyond, with bet against the retailer totaling more than $317 million.
Recent warnings on softening consumer spending, alongside profit forecast cuts from retailers Nordstrom (JWN) – Get Nordstrom Inc. Report and Macy’s (M) – Get Macy’s, Inc. Report, also suggest Bed, Bath & Beyond will face a difficult second half as it navigates both Cohen’s exit and a challenging macro environment.