Why shares of Bed Bath & Beyond are up more than 350% this month

Investors flocked to Bed Bath & Beyond, doubling the value of the so-called meme stock this week and catapulting it more than 350% in August, in a rat race fueled largely by online message boards.

The push was sparked after a regulatory filing showed activist investor Ryan Cohen was betting big on the big-box retailer. Cohen has had a devoted following of retail investors on Reddit’s buzzing message boards since becoming a central figure in the GameStop saga last year.

In January 2021, the games retailer’s shares rose from under $5 apiece to over $480, in a bet against the institutional wisdom of Wall Street. It was a remarkable turning point for a physical business which, like other retailers, had seen its customers migrate online, forcing it to close hundreds of stores in the previous year. The race attracted media attention and introduced the concept of meme stocks and trading, showcasing the power of social media in directing everyday investors.

The drama was both a David vs. Goliath tale for the digital age and an online casino-based tragedy as many investors found themselves on the losing end.

Although many newbie traders got caught up in the hype and lost money – GameStop’s stock is half its peak closing price – the phenomenon of meme stocks has continued. Retail investors are putting their money on the line again for the same reasons that drew them to equities themselves last year: many institutional investors are betting against companies, which presents a huge opportunity for gains, despite or because of risks.

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