Bed Bath & Beyond leads rout as meme stocks fizzle

Bloomberg

The unraveling of the latest meme stock frenzy is accelerating as bad news for one of the most popular retail-trader favourites piles up and investors dump riskier assets.
Bed Bath & Beyond Inc tumbled 16%, marking a now three-day drop that’s erased 60% of its market value, after a report some suppliers were restricting or halting shipments altogether after the company fell behind on payments.
The pain extended to a group of 37 meme stocks tracked by Bloomberg which dropped 3.2%, its fourth straight slide.
The retreat also follows a widespread stock market selloff amid rising worries that
the Federal Reserve would be committed to .
The benchmark S&P 500 Index slumped 2.1% in its biggest single-day decline in two months while the tech-heavy Nasdaq 100 Index fell 2.7% for its worst day since June 28.
“There are big questions about how the retailer can turn things around when the inflationary environment is hurting their potential consumer,” said Danni Hewson, an analyst at
AJ Bell.
Another meme-stock darling, AMC Entertainment Holdings Inc, was volatile as its preferred stock made its debut under the ticker “APE.”
The move splits the stock into two different units, so the value of an AMC Entertainment investment should be the combination of the two assets and not compared to what previous AMC Entertainment shares were worth, the company’s chief executive Adam Aron tweeted.
Meme stock poster-child GameStop Corp was caught in the selloff, dropping 5.5% to the lowest level in three weeks.
Bed Bath & Beyond was among the worst performing retail trader favourites alongside stocks like Jaguar Health Inc, Cenntro Electric Group Ltd, and Koss Corp, which each fell at least 7%.
SmileDirectClub Inc and Magic Empire Global were among other stocks to have recently inspired retail trading activity to fall. They each dropped roughly 15%.
Meanwhile, data from Vanda Research showed that individual investors have reduced their Bed Bath & Beyond stock purchases over the last three sessions after having snapped up a record $73.2 million.
Retail investors were active in the trading with both classes of AMC Entertainment, Bed Bath & Beyond, and Tesla Inc populating the most bought assets on Fidelity’s platform. Buying across the group of stocks markedly outpaced sales with chatter in popular day trader chatrooms pumping up the outlook for the
movie theatre and homes-good retailer.