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It seems that Ryan Cohen’s spectacular pump-and-dump scheme vis-à-vis Bed Bath & Beyond (BBBY) might not be the end of the meme stock’s spotlight moment, as evidenced by a steep rebound in the interest of retail investors around the stock, spurred by the ability of the household items retailer to secure a vital financial lifeline.
Earlier this year, GameStop’s Chairman Ryan Cohen had unleashed a major bullish impulse in Bed Bath & Beyond shares by disclosing a significant stake in the company via RC Ventures – a fund that Cohen manages. A few days back, GameStop’s Chairman unleashed another major bullish wave after disclosing that his cumulative stake in the company, including exposure via call options, stood at around 11 percent at the time, constituting a material increase.
However, as Bed Bath & Beyond shares reached stratospheric levels on the back of a 400-percent-plus rally, Cohen disclosed his intention to sell the entire 11 percent stake by filing a Form 144 with the SEC. The very next day, Cohen announced by filing a Form SC 13D/A that he had, in fact, liquidated his entire BBBY stake, unleashing a spectacular collapse in the meme stock.
Of course, the sentiment in Bed Bath & Beyond shares was also hurt by the news that the retailer was facing a severe cash shortfall, so much so that some of its suppliers had halted product shipments due to late payment issues. Moreover, the news that BBBY had tapped Kirkland & Ellis for a possible restructuring sapped the last vestiges of euphoria from the stock and killed the gamma-squeeze-driven mania.
BED BATH & BEYOND IS IN EXCLUSIVE TALKS WITH SIXTH STREET FOR A LOAN TO SHORE UP ITS LIQUIDITY AND ASSUAGE VENDORS - WSJ REPORTER TWEET
— First Squawk (@FirstSquawk) August 24, 2022
This brings us to the crux of the matter. It seems there is life yet in the short-term bullish thesis around Bed Bath & Beyond. For one, the company has now managed to secure a loan deal with the aid of JP Morgan Chase. While the size of this deal is not known, the company has been seeking a cash infusion of $375 million to pay down some of its existing debt and improve liquidity.
This news has been sufficient to revive the bullish sentiments around Bed Bath & Beyond shares, with the stock currently up around 26 percent in pre-market trading.
The latest surge is also attracting significant retail interest in Bed Bath & Beyond shares, with the stock currently at the top of various sentiment leaderboards.
The stock is currently at the top of HypeEquity’s leaderboard.
It is also featuring prominently in WallStreetBets’ discussions.
Finally, Bed Bath & Beyond seems to be leading across all subreddits right now.