This post was originally published on this site
https://i-invdn-com.investing.com/trkd-images/LYNXMPEI7G0O0_L.jpg
(Reuters) – Shares of Bed Bath & Beyond Inc (NASDAQ:BBBY) jumped 23% on Wednesday, leading a surge in meme stocks again as individual investors continued to dabble in highly shorted shares.
Bed Bath & Beyond has gained in 14 out of the past 15 sessions, helping the home goods company’s market value more than quadruple to over $2 billion. The stock was last trading at $25.93 after rising up to $30 earlier in the session.
“It truly is a quality company (but) shares are probably overvalued in the low teens and it is ridiculously overvalued at high $20s,” said Jake Dollarhide, chief executive officer at Longbow Asset Management in Tulsa, Oklahoma.
Retail investors net bought $73.2 million worth of the company’s shares on Tuesday, the highest single-day purchase in at least five years, according to Vanda (NASDAQ:VNDA) Research’s retail trade flows data, as a filing showing activist investor Ryan Cohen’s long-term call option purchases enthused retail punters.
Bed Bath & Beyond was the most actively traded single stock option on Wednesday, far ahead of popular options trades including Apple Inc (NASDAQ:AAPL) and Tesla (NASDAQ:TSLA) Inc, data from Options Clearing Corp showed.
The resurgence in retail trading comes after a rebound in U.S. stocks that helped the S&P 500 recoup more than half of the benchmark’s losses since its June low.
“It’s possible for the meme rally to spread since there is a lot of short-term capital entering the market. We’ve seen the same with Chinese meme stocks over the past few weeks as well,” Siddharth Singhai, chief investment officer at New York-based hedge fund Ironhold Capital.
Among others, e-commerce firm Vinco Ventures advanced 32% and meal-kit delivery firm Blue Apron rose 8.7%.
About 55% of Bed Bath & Beyond’s free float is shorted, an increase of 19% in the past 30 days despite the price surge, according to S3 Partners.
“While short-sellers were squeezed out when BBBY hit $10, $15 and $20 per share, there were other traders who saw (that) as attractive short-side entry points,” said S3’s Ihor Dusaniwsky.
