By Ciara Linnane
Bed Bath & Beyond Inc. shares soared 36% Monday with no apparent news driving the move, as the Wall Street Bets crowd on Reddit again embraced the “meme” stock.
One individual on the Reddit forum, who goes by the name of “TheDude0007,” said his inbox has been blowing up with inquiries about his decision-making process after he said he had “10x’d a $45K YOLO” in Bed Bath & Beyond. YOLO stands for you only live once.
The post explained that the individual has been monitoring the stock of the troubled retailer closely since Ryan Cohen, an activist shareholder, founder of pet products retailer Chewy Inc. /zigman2/quotes/212690528/composite CHWY +2.28% and head of RC Ventures LLC, took a position.
Cohen has since forced a number of changes at the company, including pushing out its “overcompensated CEO” and gaining three board seats, said the post.
Cohen has pushed hard for the sale of the company’s Buy Buy Baby chain, which appears to be happening and “a proposal of a hefty investor dividend from the proceeds has been initiated,” said the post.
The individual is essentially betting on Cohen.
“As an investor, I do not invest in companies with the conviction in which I invest in people. This theory of mine started with Steve Jobs / AAPL /zigman2/quotes/202934861/composite AAPL +0.71% , back when I was 18 and the first iPhone came out, continued with Elon Musk in Tesla /zigman2/quotes/203558040/lastsale TSLA +1.30% before they even had the first consumer vehicle on the road, and now Ryan Cohen, as he is tactically fighting to dismantle the forces of Wall Street that blatantly f*** the little guy,” he wrote.
Bed Bath & Beyond is “possibly the deepest value stock on the market,” he added.
Not everyone agrees, of course. Bank of America analysts recently wrote that the company was turning down the air conditioning at its stores to preserve cash, as it struggles with a liquidity crisis amid falling revenue.
Last week, Loop Capital analysts wrote that a visit to several stores in the northern Chicago suburbs found out-of-stock to be a major issue, with nearly empty shelves and displays throughout the stores.
“Bed Bath & Beyond is also heavily discounting much of its recently introduced private label merchandise (which evidences their lack of consumer traction), and we saw plenty of clearance items,” analysts led by Anthony Chukumba wrote in a note to clients.
“The stores also have a heavier focus on low-priced items, which we believe cheapens the overall shopping experience. Finally, we found the stores to be in poor condition and the store associates to be highly disengaged.”
One bright spot? The AC was running in every store visited.
“We continue to believe consensus (and quite frankly, maybe even our own) estimates are far too optimistic and reiterate our Sell rating and $1.00 price target,” they wrote.
Bed Bath & Beyond was not the only meme stock enjoying a rally in its shares on Monday.
OG meme stock GameStop Corp. /zigman2/quotes/203755179/composite GME -0.76% was up 12%, also with no fresh news driving it. And AMC Entertainment Holdings Inc. /zigman2/quotes/200235402/composite AMC -12.45% was up 15% and gaining for a sixth straight day, just days after reporting second-quarter earnings that showed its loss narrowing.
AMC announced a special dividend in the form of an APE preferred stock, using the name used by the investors who turned the company into a meme stock.