Bed Bath & Beyond’s 492% rally is thanks to retail traders and their “meme stock” choices.
Retailer Bed Bath & Beyond is the most recent “meme stock” to make investors rich, with an all-time high from retail investors purchasing $73.2 million in stock Tuesday.
The total net purchases over the last three weeks are $171.4 million, Bloomberg reported.
Why it’s news
Meme stocks are shares of a company that gain popularity through discussion on social media platforms. One famous example is Gamestop. In 2021, Gamestop’s shares rose dramatically thanks to online influence.
Similarly, Bed Bath & Beyond’s shares have been rising, though like GameStop, they are expected to come crashing down at some point.
Since July, the stock has had a 492% rally and seen 1.14 billion shares traded, a record number. On Wednesday, 79 million shares were traded in the first 30 minutes of opening, 11 times higher than last month’s average.
In addition to the home goods retailer, retail traders are also purchasing stock in AMC Entertainment and GameStop, perhaps trying to mimic the stock surge from last year, though their main focus seems to be Bed Bath & Beyond.
Backing up a bit
Meme stocks are a new phenomenon, starting around 2021. GameStop was the first and one of the most well-known instances. AMC and Blackberry had a similar experience.
While there are success stories of individuals making significant profit, like any investment, there can be high risk. The high from meme stocks last for an undetermined, short time period, meaning an investor is making a gamble.
Meme stocks gain popularity in social media platforms, most famously in the Reddit forum r/wallstreetbets. While Bed Bath & Beyond’s stock jump surely won’t last, there will undoubtedly be another meme stock in the future. Which one it will be however, is yet to be determined.