Meme stock Bed Bath & Beyond “decoupled from economic reality” but now crushed; it’s not alone

It’s a turbulent time for meme stocks, as evidenced by Bed Bath & Beyond’s rollercoaster week.

Shares of the struggling retailer have recently soared, driven by the Wall Street Bets crowd on Reddit. However, a Securities and Exchange Commission filing made public on Wednesday afternoon showed investor Ryan Cohen was planning to shed his large stake in the home goods retailer. Then an SEC filing made public after markets closed Thursday showed Cohen’s RC Ventures had sold its entire stake in Bed Bath & Beyond Inc. BBBY,
-40.54%,
sending its shares plunging for a second straight day.

Shares of Bed Bath & Beyond fell 40.5% in afternoon trading on Friday, after losing 19.6% on Thursday. It was on track to break the current record single-day decline of 36.4% suffered on January 28, 2021.

See now: Ryan Cohen cashed in shares of Bed Bath & Beyond with a profit of more than $58 million; stocks are plunging

The stock was down 15.0% for the week as the two-day 52.2% selloff wiped out the 78.2% rally in the first three days. Still, the stock has risen 110.3% in the past month, topping the SPX of the S&P 500 index,
-1.29%
Gain of 7.6%.

“As BBBY continues to show extreme moves alongside heavy options volumes, we seek to remind investors of the somewhat unique volatility implications that can arise in these meme-like setups, where price and implied volatility often evolve together,” wrote analyst Christopher Jacobson. at Susquehanna Financial Group, in a note released Friday.

This week, analysts reiterated the challenges facing Bed Bath & Beyond, which is struggling with inventory difficulties and declining sales. Cash flow also remains a concern. “We believe the writing on the wall is that BBBY stocks have once again become decoupled from economic reality,” Wells Fargo analyst Zachary Fadem wrote in a note released Thursday.

See now: Bed Bath & Beyond shares plummet after Ryan Cohen reveals plans to offload stake; cash remains a concern, analysts say

Other meme stocks also saw strong sell-offs to end the week. Vinco Ventures Inc. shares BBIG,
-20.00%
fell 20.3% on Friday, but was still up 63.4% on the week.

Elsewhere, shares of Weber Inc. WEBR,
-11.50%,
which posted a record 27.2% rally on Thursday, fell 0.2% on Friday but was still up 44.4% for the week.

GameStop Corp. EMG,
-3.80%
saw its stock plunge 7.9% on Friday while fellow AMC darling Entertainment Holding Inc. AMC,
-6.58%
also declined, falling 7.3%. This extended weekly losses to 14.2% for GameStop and 26.8% for AMC.

Read also: AMC and GameStop’s ‘zombie’ stocks could smell like cash burn, according to New Construct.

AMC shares were also weighed down by a Wall Street Journal report that said UK cinema chain Cineworld Group PLC CNWGY,
-45.98%

CINE,
-58.27%,
the parent company of Regal Entertainment Group, was preparing to file for bankruptcy.

Earlier this month, AMC announced its special ‘APE’ dividend, a nod to investors who have turned the company into a stock meme, who often refer to themselves as ‘monkeys’ or ‘monkey nation’. .

See now: AMC and GameStop ‘zombie’ stocks could smell like cash burn, says New Constructs

EPAs are expected to begin trading on Monday, keeping meme stocks firmly in the spotlight.

However, cash remains a concern compared to AMC and GameStop, according to research firm New Constructs.

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