Bed Bath & Beyond stock soars as trading volume explodes

Yahoo Finance Live anchors report on Bed Bath & Beyond stock skyrocketing and GameStop Chairman Ryan Cohen buying more than 1.6 million Bed Bath & Beyond shares.

Video transcript

BRIAN SOZZI: Switching gears to a potentially maybe a terrible stock in a company. And meme madness is back like it has never left before. Shares of Bed Bath & Beyond are rocking again in premarket trading. This, after the stock gained 70% at one point on Tuesday. Only to finish the day up only 29%.

This frenzied action all on the news that GameStop chairman and meme overlord Ryan Cohen was once again betting on the struggling retailer's stock. And Brad, this was a banana session for this company. A struggling retailer. At one point, stock was up close to 70%.

And you can see the data we sourced from Yahoo Finance+. The volume trends have simply exploded. And really a good timeline there some of that frenzied activity we did see. A volume explosion and Bed Bath & Beyond.

And a lot of what traders are pointing to is just a lot of short covering. Hence, you're seeing that volume spike and those wild swings in the stock. But it all triggered by a Monday disclosure from Ryan Cohen that he has been bought out of the money call options--

BRAD SMITH: Right.

BRIAN SOZZI: --on Bed Bath & Beyond. Essentially, he makes money if Bed Bath shares go above 60. And makes more money if they go up on-- go beyond 80. That's a simple way of looking at it.

BRAD SMITH: Right, and are at that range when the options expire as well. And so that is the critical thing here, too, because the strike price would imply a 66% to a 73% rise in shares from where we closed yesterday. And at that range, we're looking at some of the highs that we would have seen in Bed Bath & Beyond.

For a company that is so right now detached from fundamentals-- and sure, there's the argument that if it's a meme play or if it's a kind of social investing play, if you will, because you see so much of the fanfare around it or the short covering of the short squeeze play, that how much does it actually retain this type of steam that it's seen in the interim period?

And the larger question around Bed Bath & Beyond's future even as a whole, where do they start to lean into? I think is the question. Where do they start to lean into some of the Reddit retail traders or just the meme players out there, if you will? Because that's what we've seen AMC do.

They've offered new tiers. Does a Bed Bath & Beyond come out and say, you know what? Yeah, if you buy some shares then we're going to give you-- we're gonna send you another 20% discount coupon.

BRIAN SOZZI: You mentioned AMC. And I don't know what new interim CEO of Bed Bath & Beyond is doing. That is Sue Gove. We have not heard from this company at all. At all. She should be out there raising cash, given that the stock--

BRAD SMITH: [INAUDIBLE].

BRIAN SOZZI: Yes. That the stock price-- given where the stock is and what it's doing. This is a company that needs cash in the worst way ahead of its most important selling season of the year, the holidays. We have not heard a lick from this company. And that is just poor, poor management.

Hopefully, for them, they are at least considering these options and looking to a company, like an AMC, that has used these wild swings in its stock in the past two years to raise cash and live on to fight another day. So Adam Aron, you can criticize him a lot, but he is taking key initiatives to get the cash on that balance sheet that they have needed to get beyond the worst in their business. Bed Bath, unclear where they are. I don't know where they are. I don't know where they are, Brad.

BRAD SMITH: All right, well, maybe they--

BRIAN SOZZI: Maybe they're watching.

BRAD SMITH: Maybe. Maybe.