Bed Bath & Beyond is on course for its best month ever, even exceeding the early meme stock explosion. That's despite BBBY stock plunging from a recent intraday high on Aug. 17, including a final-day sell-off on a turnaround-and-stock-offering plan.
Fellow meme stocks GameStop and AMC Entertainment have erased big August gains and turned negative, with AMC stock tumbling after the movie theater chain went "APE split."
Bed Bath & Beyond Turnaround
Bed Bath & Beyond revealed its turnaround plan before Wednesday's open. While a meme stock on Wall Street, on Main Street, Bed Bath & Beyond is an ailing housewares retailer with big losses and tumbling sales.
The company announced plans to close another 150 stores. It'll cut 20% of corporate and supply-chain workers as part of an effort to cut costs by $250 million. It'll also slash capital spending to $250 million from $400 million.
The company said that it has gotten a $375 million loan via Sixth Street Partners, which has provided financing to other troubled stores including J.C. Penney.
Earlier Wednesday, Bed Bath & Beyond filed to sell an undisclosed amount of stock.
BBBY Stock
Bed Bath & Beyond stock plunged 26% before the open, continuing August's wild ride.
BBBY stock was up 141% so far this month as of Aug. 30. That would be its best monthly gain ever, exceeding its 99% spike in January 2001, when meme stocks true took off.
The meme stock ramped up hard for much of August. Then after the market close on Aug. 15, GameStop Chairman Ryan Cohen disclosed big out-of-the-money BBBY stock options, helping to fuel sharp gains in the next two sessions. At the Aug. 17 peak, Bed Bath & Beyond hit a five-month high of 30, up 496% from the end of July.
But after the Aug. 17 close, GameStop's Cohen announced plans to sell all his BBBY stock holdings. A day later, Cohen disclosed that he had, in fact, cashed out. Meanwhile, the housewares retailer reportedly hired a bankruptcy law firm amid heavy losses and plunging sales.
Bed Bath & Beyond fell a few days later to 8.45. This "meme reversion," in which a meme stock skyrockets but then quickly retraces much or all of the move, is not uncommon.
BBBY stock rebounded again on reports that the retailer secured a loan deal to shore up liquidity as it tries to avoid bankruptcy.
BBBY stock fell 9.3% to 12.11 on Tuesday, reversing below its 200-day line.
GME Stock
GameStop stock, the original meme stock, is now down 12% so far this month, closing Tuesday at 29.84. On Aug. 8, GME stock hit a four-month high of 47.99, up 41% at the time vs. July.
AMC Stock
AMC stock is down 36% so far in August, closing Tuesday at 9.27, at recent 15-month lows. At its Aug. 8 high, the meme stock was up 89% for the month.
Earlier this month, AMC Entertainment issued APE preferred shares to existing AMC stock holders. The APE shares are functionally almost identical to AMC stock, so it was essentially a stock split. However, APE shares are trading at a discount, closing at 5.20 on Tuesday. So the AMC+APE price is 14.47, down from AMC's 14.56 at the end of July.
The APE shares are a way for AMC Entertainment to raising more cash by issuing more shares. AMC Entertainment sought authorization to sell more AMC common shares, but investors declined. But the meme stock can sell hundreds of millions of APE shares before requiring investor approval.
Please follow Ed Carson on Twitter at @IBD_ECarson for stock market updates and more.
