The stock market has been on edge since Russia invaded Ukraine, and in addition to the human devastation, the impacts have rippled across the financial markets. Oil prices soared Monday morning above $125 per barrel, and fears about the potential fallout across the globe sent futures contracts on the Nasdaq Composite (^IXIC 2.02%) down 1% in premarket trading as of 7:30 a.m. ET on Monday.
Tesla (TSLA -1.11%) has been a hot-button stock for investors for a long time, and shares of the electric vehicle (EV) manufacturer moved modestly higher even in a falling market. But the big premarket winner was Bed Bath & Beyond (BBBY), as the once-popular meme stock saw some interest from institutional investors that could lead to a big transformation for the home goods retailer.
A Tesla Gigafactory assembly line. Image source: The Motley Fool.
Tesla moves forward
Shares of Tesla climbed almost 1% Monday morning in premarket trading. The company has had several issues put it into the headlines recently.
The most important from a fundamental business standpoint came from the government of the German state of Brandenburg, which issued a tentative permit in connection with Tesla's Berlin Gigafactory facility. The production plant had faced considerable delays that had some questioning whether Tesla would be able to achieve its intended timeline for ramping up and building to full production. In Europe, Tesla faces considerable competition from Volkswagen and other local automakers, so getting operations on the ground is an important step. The permit isn't the last step in the approval process, but it is a necessary step along the path.
Meanwhile, CEO Elon Musk made comments over the weekend saying that the U.S. and other oil producers needed to boost output in the short run in order to counteract the impact on the global economy of the war in Ukraine. Some speculated that wouldn't make EV enthusiasts happy, but Musk acknowledged that what was best for the world at large right now wasn't necessarily what's best for Tesla as a company.
Bed Bath's stock jumps Beyond belief
The big gains on the Nasdaq were reserved for Bed Bath & Beyond, whose shares soared 65% in premarket trading. The home goods retailer has been on ordinary investors' minds for more than a year now, but it's now getting the attention of an unlikely fellow player in the meme stock universe.
Investment company RC Ventures disclosed that it holds a nearly 10% stake in Bed Bath & Beyond. RC's leader, Ryan Cohen, is a billionaire investor, and he's best known as the co-founder of online pet food giant Chewy and as chair of the board of directors of fellow meme stock GameStop.
In the letter, Cohen lambasted Bed Bath & Beyond's business strategy, arguing that the retailer's turnaround efforts have too broad a scope. Cohen believes that a narrower focus on operational efficiency and inventory management is crucial, and he urged Bed Bath & Beyond to look at a sale of the company or at least breaking off its Buy Buy Baby store chain with children's apparel and accessories.
Bed Bath & Beyond acknowledged receipt of the letter and gave the usual boilerplate answer, saying that its board will act in shareholders' best interests and review strategic suggestions. However, just a single year into a multi-year recovery plan, Bed Bath & Beyond probably won't give up to Cohen without a fight. Shareholders seem to hope otherwise, but many still see little future for Bed Bath & Beyond in the absence of an aggressive strategic move like what Cohen is suggesting.
