Bed Bath & Beyond Tumbles Toward a 30-Year Low as Meme Traders Stand By

(Bloomberg) — The day-trading die hards who once rallied behind Bed Bath & Beyond Inc. appear to have abandoned the struggling retailer.

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A little more than two weeks after the company received a financial rescue to keep it out of bankruptcy, its shares have lost 74% of their value, falling in 11 of the past 12 days. That’s pushing them back toward the three-decade low hit in early January.

That $225 million lifeline from a group led by hedge fund Hudson Bay Capital Management has promised to significantly increase the number of shares outstanding and was structured to allow the new investors to profit as long as the stock holds above 71.6 cents. Rather than spurring optimism about the company’s survival, the deal has has hit individual investors who once piled in when the stock traded above $20 — a far cry from Wednesday’s $1.62 close. It lost over 5% more soon after the market’s open Thursday.

The drop underscores the shifting landscape for so-called meme stock traders — who once teamed up on social media to snap up shares of struggling companies — since the Federal Reserve’s rate hikes have pulled down the stock market.

In the 11 sessions through Wednesday the retail trading crowd had bought about $44 million worth of Bed Bath & Beyond stock, according to data from Vanda Securities. That’s far less than the $73 million they bought in a single day in August and a tiny fraction of the total $17.9 billion individuals have put into US stocks and exchange-traded funds since Feb. 6, the data show.

Chatter about Bed Bath & Beyond on popular forums like Reddit’s WallStreetBets and Stocktwits has been subdued as retail traders shift their focus to far bigger companies like Nvidia Corp., Tesla Inc., and Alibaba Group Holding Ltd.