BBBY - Bed Bath & Beyond is up 54% but shorts may still be betting on bankruptcy

Bed Bath & Beyond ( NASDAQ: BBBY ) extended its four-day rally on Wednesday with a 54% move higher as some bankruptcy fears eased. Shares of BBBY now trade back at the level seen in the early part of December.

S3 Partners ' Ihor Dusaniwsky said the action up until today was not part of a short squeeze. However, he thinks shorter-term short sellers could exit their positions and begin to pocket (realize) the profits they earned in 2022 if the rally continues. The alternative is that long-time shorts ride out the recent rally to see if bankruptcy concerns increase again.

Using its proprietary data, S3 calculates that short interest as a percentage of total float on BBBY is about 52%, which ranks it second of all stocks with more than $10M worth of short interest.

GameStop, Beyond Meat and Wayfair were some of the other highly-shorted stocks that pushed higher on Wednesday.

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