(Reuters) – Shares of Bed Bath & Beyond, popular among retail traders, were set to jump at market open on Wednesday and extend their rebound from multi-decade lows hit last week following news of the company’s plans to seek bankruptcy protection.
Stock, among the most traded U.S. stocks before the opening bell, was last up 24% at $2.58. It has risen about 60% so far this week.
Other popular stocks among retail traders also rose on Wednesday, with GameStop and AMC Entertainment up 2.6% and 7.1%, respectively.
Struggling U.S. home goods retailer Bed Bath & Beyond on Tuesday reported a much wider-than-expected quarterly loss and said it would lay off more employees in an attempt to reduce costs, days after it said it was exploring options including bankruptcy.
The potential bankruptcy news sent the company’s shares to their lowest level since early 1990s at $1.27 on Friday.
“Speculation (that) Bed Bath & Beyond could be an M&A target for an opportunistic buyer, combined with its cost cutting measures have helped support the stock,” said Victoria Scholar, head of investment at Interactive Investor.
“However, the risk of bankruptcy remains and the stock is still down 60% over the last 6 months.”
The company’s shares were among the top three most traded stocks on Fidelity’s retail platform on Tuesday.
Bed Bath & Beyond has about 38.6% of its shares under short position, per Ortex data as of Monday.
Nearly two years ago, retail punters bid up Bed Bath & Beyond’s shares by banding together on online forums, costing bearish hedge funds billions of dollars.
The shares, which surged as much as $53.90 at the height of meme stock frenzy in 2020, have plunged about 96% from that level and lost 83% last year alone.
(Reporting by Medha Singh in Bengaluru; additional reporting by Bansari Mayur Kamdar and Amruta Khandekar; Editing by Shinjini Ganguli)
