Shares of Bed Bath & Beyond (BBBY) opened the day up as much as 13% as yesterday's rally seemed set to continue today.
However, that surge quickly faded, and as of 11:26 a.m. ET on Tuesday, the stock was actually down 3.9%, mirroring a sell-off in the broad market as the S&P 500 was down more than 1% after opening the day in positive territory.
This morning's price action was a reminder of how unpredictable the meme stock has become. Shares of Bed Bath & Beyond rallied more than 700% in the span of a few weeks earlier this month on a short squeeze fueled by traders on platforms like Reddit's WallStreetBets and Stocktwits. However, that surge evaporated two weeks ago after activist investor Ryan Cohen suddenly sold his entire stake in the home furnishings retailer.
Last week, the company said it would provide a strategic update, including a conference call set for tomorrow morning. That seemed to drive yesterday's 25% jump in the stock, as traders anticipated good news, and rumors on WallStreetBets circulated of a possible sale of BuyBuyBaby or another asset.
The company is also lining up $400 million in financing, which should give it a valuable lifeline as its liquidity is shrinking and consumer spending has shifted away from home goods, leading to steep losses in recent quarters.
This morning, Bed Bath & Beyond remained a hot topic among traders on WallStreetBets and Stocktwits, who were pumping it up again ahead of tomorrow's key update. A number of traders on WallStreetBets posted significant purchases in the stock and discussed potential outcomes for Wednesday's strategic update.
This morning's sell-off, which is being driven by unusually high trading volume once again, seems to reflect nervousness among traders about tomorrow's update, and some are fearful of a "buy the rumor, sell the news" kind of event. Traders may also be looking to lock in gains as the stock has nearly tripled from where it was when the rally started at the end of July.
Bed Bath & Beyond likely needs a transformative piece of news to give investors a fundamental reason to buy the stock. Its recent results have been awful, and it just fired CEO Mark Tritton, who was hired in 2019 to turn around the struggling retailer.
While we don't know what tomorrow's announcement will be, one thing is clear: It's certain to be another wild trading day for the popular meme stock.