Bed Bath & Beyond ( NASDAQ: BBBY ) stock surged over 20% higher on Friday as a short squeeze is likely in progress.
According to Ihor Dusaniwsky, head of predictive analytics at S3 Partners, the meme-stock has seen significant increases in short interest in the past 30 days. Per the firm’s data, short interest reached 52.80% of its float on Friday, bringing the stock a 100/100 “squeeze score” based on the crowded nature of the short.
“Today’s price move should push the more momentum based short sellers into squeeze based short covering, and fundamental short sellers should start getting taps on the shoulder by CRO’s to exit a losing position even though their trading thesis conviction may be high,” Dusaniwsky told SeekingAlpha. “We expect an increase in buy-to-covers as this BBBY rally continues, shorts should be trimming their exposure and helping long-buyers bid up BBBY’s stock price.”
Amid the spike, short sellers were hit with over $50M in losses on Friday, bringing mark-to-market losses to near $90M in the first week of August. Nonetheless, the firm’s data reveals short sellers remain up over $17M year to date with the stock still down over 50% year to date.
Read more on the dynamics for Carvana ( CVNA ) that are likely aiding its own surge on Friday.
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Bed Bath & Beyond shares soar amid suspected short-squeeze