Bed Bath & Beyond and Avis Become the New Meme Stocks

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Business|Meet the caller meme stocks? Shares of Avis and Bed Bath & Beyond soar.

https://www.nytimes.com/2021/11/03/business/bed-bath-beyond-avis-kroger-stocks.html

  • Nov. 3, 2021Updated 10:43 a.m. ET

Shares of the rental car institution Avis Budget Group much than doubled connected Tuesday, successful a abrupt and unexpected surge that recalled earlier trading manias successful GameStop, AMC Entertainment and different alleged meme stocks. Bed Bath & Beyond, the retailer that attracted immoderate involvement during erstwhile meme-stock episodes, besides roseate sharply successful precocious trading.

The moves appeared linked to respective factors, including affirmative firm announcements, a surge successful involvement from retail investors and the squeezing of abbreviated sellers. Avis released better-than-expected earnings connected Tuesday and executives hinted astatine plans to bargain much electrical cars. Bed Bath & Beyond announced a concern with the market concatenation Kroger and updates astir its stock buyback program.

More pertinently, perhaps, some companies are fashionable targets of abbreviated sellers, which besides makes them appealing for “meme-stock” traders — who get their sanction due to the fact that they stock ideas, squad up and promote each different connected societal media, adopting the inscrutable, joke-laden connection of viral net trends. In a abbreviated squeeze, a rising terms tin unit investors who had stake against a banal to bargain the shares successful bid to adjacent their positions, multiplying gains.

This year, the mostly amateur investors banded together to pump up the prices of a fistful of companies, gaining a self-fulfilling momentum and transforming the firms’ fortunes. Caught disconnected defender by the hyperbolic trading patterns, Congress has held hearings and regulators person issued reports astir what to do, if anything, astir this almighty caller unit successful the markets.

Shares successful Avis opened astir 12 percent little connected Wednesday, retaining astir of the erstwhile day’s rise, portion Bed Bath & Beyond roseate much than 50 percent.

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