Meme stock Bed Bath & Beyond’s rally rages on

Signage is seen at a Bed Bath & Beyond store in Manhattan, New York City, U.S., June 29, 2022. REUTERS/Andrew Kelly/File Photo

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Aug 16 (Reuters) – Shares of Bed Bath & Beyond Inc (BBBY.O) surged 60% to a near five-month high in volatile trading on Tuesday, as retail investors continued to drive up the highly shorted stock’s price.

Bed Bath & Beyond, which has 50.7% of its public free float in short position, has triggered a short squeeze signal, according to analytics firm Ortex.

A short squeeze occurs when a surge in price of an asset forces bearish investors to buy back shares at a higher price to limit losses, in turn driving demand and pushing the price even higher.

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The home furnishing company’s shares were the most traded on brokerage Fidelity’s platform, indicating interest from individual investors.

The stock rose as much as 78.8% to $28.60 during the session and trading was halted multiple times for volatility. About 189 million shares changed hands by 11:47 am ET, more than six times the firm’s 30-day moving average volume.

The stock is up 440% so far this month in a rally that evocative of eye-watering gains in shares of GameStop (GME.N) and AMC Entertainment (AMC.N) early last year that hurt hedge funds that had bet against the stock .

Bed Bath & Beyond opened lower after B. Riley downgraded the stock to “sell”, saying the shares are trading at “unrealistic valuations.”

Another highly shorted stock, meal-kit delivery firm Blue Apron (APRN.N), jumped nearly 20% to $5.50.

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Reporting by Medha Singh in Bengaluru; Editing by Maju Samuel

Our Standards: The Thomson Reuters Trust Principles.

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