Shares of Bed Bath & Beyond (BBBY -22.42%) were on a roller-coaster ride this week. A short squeeze propelled the stock higher earlier in the week, but the momentum faded after Ryan Cohen’s investment firm filed to sell its stake in the struggling home furnishings retailer.
According to data from S&P Global Market Intelligence, Bed Bath and Beyond had gained 38.5% for the week through 1:16 p.m. ET on Thursday.
Through Wednesday, Bed Bath & Beyond had gained in 14 out of 15 sessions as the heavily shorted meme stock attracted attention on Reddit’s WallStreetBets forum and traders piled into it this week, pumping up the price on high volume.
Trading volume in the stock peaked on Tuesday at nearly 400 million shares, representing roughly $8 billion exchanged in the stock, and at one point on Tuesday, the stock had nearly doubled. As of July 29, 103% of the float was sold short, making it a convenient target for the meme traders from WallStreetBets.
However, after gaining as much as 700% over a three-day span, the trade unraveled on Thursday after a filing showed Ryan Cohen’s RC Ventures plans to sell its entire stake in the retail stock. Cohen is the co-founder of Chewy, and he helped propel the stratospheric rise in GameStop shares early last year. Cohen had taken a stake in Bed Bath & Beyond stock earlier this year, helping to fuel the retail stock’s recent rise, but after accumulating roughly $150 million worth of the stock he decided to sell. Given the size of the stake and Cohen’s influence, it wasn’t surprising to see shares fall on the news.
While the Cohen sale could mark the end of the Bed Bath & Beyond rally, where the stock goes in the short term will depend on trader interest and how much of the stock is still shorted after the recent squeeze.
Based on the fundamentals, there’s little justification for continued gains as the company posted a wide loss and a plunge in sales in its most recent quarter. It also ousted its CEO. For now, though, fundamentals are irrelevant to the stock movement.