On Wednesday, BBBY is expected to rally from Tuesday’s close as meme stock investors believe the company can be an acquisition target.
It increased by 27.78% to $2.07 per share on January 10. Shares of Bed, Bath & Beyond is forecasted to go up by 17.40% to $2.43 in the next session.
The US store can be a potential acquisition target as short-sellers close out bets.
Also, online retail stock forums, such as Reddit, have been sparking up a possibility of a mergers and acquisitions deal. It powered a buying frenzy similar to the meme stock rally phenomenon of 2020.
Due to the rally, BBBY rose by 32.00% after most COVID-19 restrictions were lifted.
A meme stock pertains to the shares of a company that went viral due to high social sentiment. Online social media platforms usually heighten this type of view.
Likewise, its shareholders are usually unorganized, independent individuals with investment views and preferences. As a result, their actions can lead to short squeezes in heavily shorted names.
In addition, Ryan Cohen, a Chewy billionaire who became GameStop’s chairperson after the meme stock rally, purchased a 9.80% stake at BBBY. According to analysts, it could potentially restore the brand’s credibility.
Weak earnings data, BBBY to Lay Off Staff
Moreover, BBBY earnings per share went down to -$3.65, lower than the foreseen -$2.38 data. The number is below the prior statistics of -$3.22. The units are released on January 10.
Likewise, its revenue declined to $1.26 billion, lower than the anticipated $1.33 billion and smaller than its previous figures of $1.44 billion.
Last year, BBBY stated that it would close 150 stores and lay off 20.00% of its supply chain and corporate employees.
On Tuesday, the retailer did not specify whether it would file for bankruptcy protection. However, they would cut off more workforce to reduce costs.
The household goods company ceased about $80.00 million to $100.00 million across the business.
Furthermore, Chief Executive Sue Gove said BBBY failed to meet its goals as it faced credit line constraints. Also, vendors are asking for quicker payments.
