A Massive Short Squeeze Is Underway: Bed Bath And A Few Favorites Are In Play

Several favorite stocks among retail traders are rocketing higher Wednesday in what could be seen as a short squeeze. Here’s a look at the stocks moving and what could be next.

What Happened: On Wednesday, shares of several stocks that became the favorites of retail traders in 2021 and 2022 were coming back to life with double-digit moves in some cases on no news.

Here are the stocks that are moving:

AMC Entertainment Holdings Inc AMC: +18%

GameStop Corp. GME: +6%

Bed Bath & Beyond Inc BBBY: +51%

Carvana Co CVNA: +24.7%

Each of these stocks saw similar surges over the past two years on calls for a short squeeze by investors.

Data from Benzinga Pro showed a short interest of more than 20% in each of the four names listed above.

Short interest increased in several of the names as reports of bankruptcy had gone up. Carvana saw shares highly volatile at the end of 2022 with reports lenders were working on plans to restructure the company.

Bed Bath & Beyond was also the subject of recent rumors that the company was preparing to declare bankruptcy.

Related Link: Ambrx Biopharma, PaxMedica And 3 More Short Squeeze Stocks That Could Soar This Week 

Why It’s Important: Short squeeze targets continued to attract investors as high short interest and a high cost to borrow on shares can often lead to short-term large upward movement for stocks with enough buyers getting involved in the stock.

Bankruptcies can wipe out values for companies but sometimes it can take months for the move to $0 to happen and traders often capitalize on the high volatility. Shares can often move on any positive news of restructuring, new loans or plans to fend off a bankruptcy declaration.

Two other stocks to watch could be Blue Apron Holdings Inc APRN, which fell to less than $1 a share. The meal delivery company was a popular short squeeze candidate in 2022.

Another name to watch could be Party City Holdco Inc PRTY with shares under $1. Party City was also the subject of bankruptcy rumors. The party retailer saw shares jump from around 20 cents to 70 cents on Tuesday on news of talks with lenders.

Stocks moving on reports of short squeezes can be extremely volatile and investors should consider approaching with caution. The stocks listed above all have a chance of surviving and shares going higher, but also all have a chance of going lower or potentially to $0 with bankruptcies.

Read Next: Exclusive: Top 10 Most Searched Tickers On Benzinga Pro In 2022, Where Do SPY, Tesla, Apple And AMC Rank? 

Photo: Yuriy K via Shutterstock