Bed Bath & Beyond (NASDAQ: BBBY) stock is what we might call volatile these days. The reason is that no one is really trading on fundamentals here - obviously, for fundamentals don't change that fast. Rather, we're seeing sweeping changes in sentiment as the days go past. That's why BBBY stock can go up 35% one day and back down 24% the next to get near that original starting point. Yes, that is how percentages work too, as we change the denominator.
As background here BBBY seems to be just another one of those retailers who have lost their way. As with GameStop for example - and there's a close connection there too. The backer of GameStop who was able to revitalise that company took a stake in Bed Bath & Beyond. Made a good profit too but then fled the position. Perhaps realising that there wasn't much to be done - or maybe just booking a good profit. Things haven't gone much better since. There's been some money raising through a stock issue but BBBY seems grossly short of working capital to revamp and even restock the stores.
Bed Bath & Beyond stock price from NASDAQNote the top right hand corner, premarket it's slipped back to yesterday's starting point.
The informed speculation now is that BBBY will have to go into Chapter 11 bankruptcy and reorganisation proceedings. Well, the bet is that that's a racing certainty in fact. What isn't known is what would be the outcome of such a process. A reorganisation and rebirth freed from the debt burden, but at some price in dilution? Or is the whole concept simply not viable these days and so into something like Chapter 7, or a sale of the corporate assets to whoever? No one's really sure but that's what's driving the volatility. We've no objective information or measures we can use. We're all just wondering. Which makes BBBY wonderful fun to trade but it's extremely difficult to know which way to trade it.
