Shares of Bed Bath & Beyond (NASDAQ:BBBY) skyrocketed more than 50% in today’s trading session at the time of this writing. There was no positive news to act as a catalyst for the surge. In fact, it was recently reported that BBBY missed payments to debtholders.
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The odds of bankruptcy continue to climb. Yet, almost 100 million shares of BBBY stock have been traded today. For reference, the average is usually closer to 40 million shares. This could be short-sellers taking profits. Similar to a “sell the news event” when companies release positive updates, the opposite applies to short-sellers when a company releases bad news that was widely anticipated.
However, given that short interest is somewhere in the mid-40% range, those betting against the stock continue to be squeezed as they all rush for the exits at the same time.
The past three months have been very volatile for BBBY stock, as sharp rallies and crashes have become very common for its investors. Overall, the stock remains almost 23% lower over this timeframe.
