BBBY Stock Forecast
BBBY Stock Forecast: The latest addition to the list is Bed Bath & Beyond stock (Nasdaq: BBBY) whose share price has become too volatile to handle as institutional investors and meme traders lock horns against each other.
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There are popularly two sets of investors, long-term investors looking for quality stocks and investing after fundamental and technical analysis and holding the stocks for a horizon of 5-10 years, and then there are meme traders, ardent followers of the Reddit platform, holding the capacity to take share price of a particular stock to any upside or downside level, leaving behind all the fundamental and technical analysis of economists and investors.
In the last couple of years, we have seen examples of such frenzy trading and meme stocks like GameStop touching new heights every day, squeezing the big institutions and in turn making some of them bankrupt. AMC Entertainments’ share is one such stock propelled by meme traders, which went up from $10 to $60 within a month in May and June 2021 and is back to $19 as of 19.08.2022.
The latest addition to the list is Bed Bath & Beyond stock (Nasdaq: BBBY) whose share price has become too volatile to handle as institutional investors and meme traders lock horns against each other. In this article, we will trace the journey of this meme stock, the reasons for its current upward and downward movement, and what lies ahead after this tsunami of Reddit traders leave the stock.
BBBY Stock Forecast: Bed Bath & Beyond- Journey Before 2020
BBBY stock was not targeted as meme stock always. It debuted on the Nasdaq index way back in 1982 at a split-adjusted price of only $1. It had four splits in its journey till now, all between 1993 and 2000 and all were 2:1. The share price peaked in December 2013, at a price of $77, and in February 2015 at a price of $78, but since then it has been a one-way journey to the rock bottom and it touched $3.94 in April 2020, due to pandemic fears on businesses across the globe and poor management. It is when it caught the attention of Reddit investors and hence the journey to becoming a meme stock started.
BBBY Stock Forecast: Latest Developments for Bed Bath & Beyond Inc
Ryan Cohen’s Intention to Sell Entire Stake- Recently, activist investor Ryan Cohen, Chairman of GameStop and also co-founder of online pet retailer Chewy showed his intention to sell his entire stake in Bed Bath & Beyond. As per Form 144, signed on Tuesday and filed with SEC, the ace investor, through his firm RC Ventures proposed to sell 9.45 million shares of the company. RC Ventures holds 7.78 million direct shares with a valuation of $119.4 million and call options that are exercisable into $1.67 million shares. After the announcement came on Wednesday post-market hours, the stock fell 28% in the post-market trading before the next day opening from $26.25 to $18.91. Yesterday, i.e., on 18.08.2022, registered a total loss of more than 19% to close at $18.55. As per an SEC filing, Cohen owned nearly 12% of the shares of Bed Bath & Beyond, which he revealed in March 2022.
Frenzy Trading in August- Apart from yesterday’s fall, it has been a great month for BBBY stock as it rallied 300% till Wednesday, August 17th, 2022. It included five days of more than 20% gain amid heavy trading volume. For reference, the traded volume was around 6-7 million in July or before, which picked up the craze in August and volume went beyond 100 million on regular basis in August. On Wednesday, nearly 395 million shares exchanged hands. The reason for the frenzied trading is the popular Reddit page Wall Street Bets and as per data, Bed Bath & Beyond is the most mentioned stock on the WSB page, with post volume about five times higher than that of GameStop. It is an attempt by the retail investors to take the share price higher for a stock having a huge short interest in order to create a squeeze situation and force the hedge funds and other institutional players to close their short positions, propelling the share price even further.
The financial position of Bed Bath & Beyond – Keeping aside this meme-based trading, financials have their own value and play an important role in deciding the future action for any investor. The financial position and balance sheet for the company have not been in good shape since Covid 19 pandemic. Due to the pandemic, the company announced the closure of more than 200 stores, roughly 21%. From a net positive income of $424.86 million, it was reported in 2017, it has dropped to a loss of 559.62 million in 2021. In the recent quarter, it reported a net loss of $358 million, as compared to a $51 million loss in the same quarter a year ago. Moreover, the estimated earnings per share for 2022 is expected to be -6.22 per share, a significant downfall from $2.05 in 2018.
BBBY Stock Forecast: Latest News
- Bed, Bath & Beyond plans to offer 11.7 million shares to bondholders in an effort to pay off some of its large debt of almost $1 billion. By issuing shares and raising $123 million, the company intends to reduce its debt by about 12%. The meme stock fell by 5.32% on Monday due to the news, which left investors less enthusiastic. The company has undergone a series of changes, including recruiting a new CEO, and struggles with tense supplier relationships.
- The deal is expected to be finalized on or around November 16, 2022.
- A total of $69 million in 2024 notes, $5.8 million in 2034 notes, and $48.2 million in 2044 notes were exchanged by the existing holders.
BBBY Stock Forecast: Technical Analysis
Looking at the weekly charts of BBBY, we can see that the stock is at its lows in 2020. This is a very big red flag for the company as the financials and fundamentals don’t seem to be giving any sort of good signals. It was in a downtrend since 2017 which it broke around but failed to capitalize on and this has led to huge selling in the stock. Below $3.70, any confirmation candle will be good enough to bring this stock down to cents in the upcoming weeks. Its last support will be given from $1 levels which was the price it got listed on. We could see a pullback from there but one should not get their hopes high in this stock unless this stock is able to clearly break the downward trendline which is being represented in green.
BBBY Stock Forecast: Price target for the next 12 months
|Average BBBY Stock Forecast for the next 12 Months||$4.8|
|Odeon Capital Group||$7.5|
“We reiterate our Sell rating with a 12-month price target of $2 given weak 2Q comp trends, along with ongoing inventory issues and negative consumer sentiment,” wrote analyst Kate McShane, Goldman Sachs.
BBBY Stock Forecast: Q2 Results
- The company released its quarter 2(which ended on August 27th, 2022) results in September.
- The company’s total revenues were declared as $1437 million, down 28% year-over-year.
- Its gross profit was declared as $398.3 million, up 13.7% compared to the previous quarter’s $350 million.
- Its total operating expenses decreased from $637.5 million, in the previous quarter to $634.9 million, in this quarter.
- Its operating loss is $346.2 million, which is up 3116% year-over-year.
- Its net income (loss) has increased from $357.7 million in the previous quarter to $366.2 million in this quarter which is a 2.37% increase q-q and 400.2% year-over-year.
- Its diluted net loss per share is $4.59, up 2.2% q-q and a significantly increased loss of 537% year-over-year.
BBBY Stock Forecast Today
|1. Market's Wisdom||N/A|
|1a. Market Data||N/A|
|1b. Technical Recommendation||Neutral|
|2. Crowd's Wisdom||Partially Positive|
|2a. Social Media Buzz||Higher|
|2b. Social Media Sentiment||Neutral|
Note: Crowdwisdom360 collates Predictions and data from all over the net and has no in-house view on the likely trends in the Stocks or Crypto Coins. Please consult a registered investment advisor to guide you on your financial decisions.