For vocal Bed Bath & Beyond bear Anthony Chukumba, the recent gyrations in Bed Bath & Beyond’s stock — despite the retailer being on the brink of bankruptcy — underscore the need for people to boost their financial literacy.
“It is a living, breathing example of the need for financial literacy education in the United States,” the Loop Capital analyst said on Yahoo Finance Live (video above). “I mean, Bed Bath & Beyond is going to go bankrupt.”
Bed Bath & Beyond finished Friday’s session down 30% in another day of volatile trading for the meme crowd favorite. On the week, shares surged an eye-popping 179%.
The wild upward price action occurred after Bed Bath & Beyond didn’t utter the world “bankruptcy” on its otherwise brutal Tuesday morning earnings release. The lack of a bankruptcy announcement seemed to embolden bulls in the stock, causing bears — specifically short-sellers — to quickly cover their shorts, only creating more upward momentum in the stock.
Then, on Friday, the New York Times reported that retail-focused private equity shop Sycamore Partners was kicking the tires on buying parts of the near-death home goods seller.
“As is our practice, we do not comment on speculation of this nature,” a Bed Bath & Beyond spokesperson told Yahoo Finance via email.
In any case, to Chukumba’s point, investors who drill down into Bed Bath & Beyond’s fundamentals with their evaluation tools of choice would find that the numbers clearly do not justify a 135% stock gain in a week.
“The fact that the stock is up since they reported earnings is nonsensical, in a word, quite frankly,” Chukumba added. “When they file [for bankruptcy], the equity will be worthless.”
A painful lesson will be learned by some if that happens.
Brian Sozzi is an editor-at-large and anchor at Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn.
Click here for the latest trending stock tickers of the Yahoo Finance platform
Click here for the latest stock market news and in-depth analysis, including events that move stocks
Read the latest financial and business news from Yahoo Finance
Download the Yahoo Finance app for Apple or Android
Follow Yahoo Finance on Twitter, Facebook, Instagram, Flipboard, LinkedIn, and YouTube
Source: finance.yahoo.com