Shares of Bed Bath & Beyond (NASDAQ:BBBY) are skyrocketing as the momentum that began on Monday continues to accelerate. BBBY closed last Friday at $1.31 per share but hit a high of $3.46 earlier today.
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BBBY stock is not rallying for fundamental reasons, as bankruptcy concerns have been floating around. Indeed, a restructuring plan will likely be required to save the company, which would wipe out equity holders. Instead, it seems more likely that short sellers have been closing their positions, leading to a short squeeze.
In addition, it’s worth noting that analysts have been giving up on their coverage of the stock due to its low market cap and lack of institutional interest. In the last three months, only four analysts have issued ratings on BBBY. For reference, 19 analysts were covering it just last summer.
Of the four remaining analysts, every single one has a Sell rating on BBBY with an average price target of $1.45 per share. As a result, this implies significant downside risk of 52.3%, as indicated by the picture above.
