Bed, Bath and Beyond Saving

The meme stocks are dying

Stephen Moore


Image: Badly edited by author

What do you get when you mix pandemic-forced lockdowns, stimulus checks, the Reddit sub r/WallStreetBets, access to the entire trading market in the palm of your hand, and a collective desire to disrupt the status quo and stick it to the man?

Yup, you guessed it.

Meme stocks.

This perfect cocktail of factors led to a few lucky stocks being chosen, without much rhyme or reason, for the ride of a lifetime. Like stuffed toys trapped in a fairground machine, they were grabbed by the claw and carried into the air towards a new existence — cult-like status with a cult-like following. And as the months ticked on, the cult grew bigger, more vocal, and more devoted. As more and more bought in, the price started to rise. And rise. And rise.

The two biggest winners, GameStop and AMC, experienced insane gains — especially when you consider that GameStop was a long-struggling business and cinemas were closed due to the pandemic. Or in other words, it made no fundamental sense (more on that later):

From these two stocks, soon branded meme stocks, retail investors (i.e., those using their own money, trading on Robinhood from the comfort of their toilet seat) made bank. Well, some did. Others got swept up in the hype, threw their money in at the top of the mountain peak, and may as well have set it on fire instead. If you’re not first, you’re most certainly last. Investors also suffered and took to our TV screens, airwaves and Netflix documentaries to try and understand why the short positions they had adopted (betting the price would go lower) were now crippling their investment companies. It even forced Melvin Capital, one of Wall Street’s more successful Hedge Funds, to close. Boo hoo, said the Redditors as they rejoiced and doubled down.

Which other stocks were there for the taking?

Enter Bed Bath & Beyond (BBBY)

Yes, the struggling retailer that, at the time, was bleeding money and being crushed by Amazon. Yes, the…