Bed Bath & Beyond Inc.'s 349% three-week increase defies warnings from Wall Street banks about the firm's high valuations and has rekindled a wave of meme stock buying.
IMG source Google
IMG source Google
The stock continued to rise on Tuesday, reaching a high of 79%, before cutting gains to 29% and closing at $20.65 following two trading halts.
IMG source Google
IMG source Google
According to Bloomberg data, the stock was the most actively traded one, with 385 million shares changing hands—more than 20 times the three-month average.
IMG source Google
IMG source Google
In spite of at least three Wall Street banks downgrading the home goods company and advising investors to sell the shares due to the "meme stock frenzy," the stock has risen.
IMG source Google
IMG source Google
Earlier on Tuesday, Susan Anderson of B Riley Securities downgraded the retailer's $1.65 billion value to "unrealistic," and changed her recommendation to "sell."
IMG source Google
IMG source Google
Before the stock's most recent spike, Baird's Justin Kleber downgraded shares, saying that the "fundamental risk/reward looks unappealing" due to the company's increasing market share losses and capital burn.
IMG source Google
IMG source Google
Despite this, retail traders continued to buy heavily, pushing $99 million into the stock since July 26. This is according to statistics provided by Vanda
IMG source Google
IMG source Google
The stock rose 24% on Monday to close at its highest level since late April, contributing a record $46 million to the net inflow, according to the statistics.
IMG source Google
IMG source Google
Some investors are banking on the shares to rise further. Call options betting on the stock to trade above $45 by the end of the week, alongside other contracts betting on a rise to $80 by mid-January,