The meme frenzy continued for stocks including Party City Holdco (PRTY), Caravana Co (CVNA), Arrival (ARVL), and Bed Bath and Beyond (BBBY) on Thursday as except for Arrival, all the stocks shot up by nearly 50%. ARVL, on the other hand, gained almost 100% on Thursday.
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The share rally for Bed Bath and Beyond came even as there has been a buzz that bankruptcy looms for the merchandise retailer while its Q3 earnings have been a disappointment.
In a bid to save costs, the retailer also indicated that it could lay off employees.
BBBY has been a meme crowd favorite and the stock saw huge stock volatility through last year as it dropped more than 60%.
The meme stock rally started back in 2021, when a group of retail traders on Reddit, WallStreetBets started to bid up heavily shorted stocks resulting in massive short squeezes resulting in pain for short sellers.
Pain was inflicted on short sellers because as the stock jumped higher, it forced short sellers to buy back their shares at higher prices to limit their losses. This only led to fueling the stock rally.
Currently, around 50.3% of BBBY’s float shares are being sold short. According to a CNBC report, citing data from S3 Partners, the short interest in BBBY stock is far more than an average of 5% short interest in a typical stock listed on U.S. stock exchanges.
PRTY stock jumped 46% on Thursday to close at $0.41 on the back of a spike in short interest. Currently, 14.1% of PRTY float shares are shorted. This is even as there have been reports of the retailer filing for bankruptcy over the coming weeks as it looks to cut debt.
Even Wall Street analysts have stopped coverage and only one analyst has covered the stock in the past three months with a Hold rating and a price target of $1.25 on the stock.
Carvana is another popular name in the short-interest category even as the used car retailer has been struggling as sales have slumped with higher car loan rates and burgeoning inventory. To add to its woes, the retailer recently lost its Michigan car dealer license.
CVNA stock has nosedived more than 95% in the past year. Currently, 58% of CVNA float shares are shorted.
Interestingly, Wall Street analysts remain sidelined about CVNA stock with a Hold consensus rating based on one Buy, 14 Holds, and two Sells.
Arrival, the British EV manufacturer has not exactly arrived since its listing on Nasdaq back in 2021. ARVL stock has tanked more than 90% in the past year as the company has been struggling to meet its EV production goals amid supply chain constraints.
Moreover, there were reports back in November that one of its electric delivery vans caught fire during a demonstration for the customer UPS (UPS).
Short interest in the stock currently stands at 22.8%.
Conclusion
It is evident that the meme frenzy for these stocks is alive and well even as these companies are on the verge of bankruptcy and are struggling big time.
It remains to be seen how long this meme stocks rally will last.
