PreMarket Prep Stock Of The Day: Bed Bath & Beyond

Some companies do not follow the standard fiscal earnings calendar, which would have them reporting fourth quarter results for fiscal year 2021 over the next few weeks.

One of those companies is Bed, Bath & Beyond BBBY, which reported third-quarter earnings Thursday and is the PreMarket Prep Stock of the Day.

Another Meme Stock Craters: With the flavor for much of 2021 being “meme” stocks with either a low float or high short interest, this issue was one of the favorites. Last January the issue tripled from its 2020 year-end close ($17.70) to $53.90 on no fundamental news.

Another similar event occurred in June when the issue was manipulated up to $44.51 before crashing down again. The most recent orchestrating of price manipulation was in early November, when the issue had three-day trading from $14.12-$25.72. The fallout from that move culminated on Wednesday when the issue bottomed at $13.32.

Bed Bath & Beyond's Q3 Report: Before the market open Thursday, the company reported a quarterly loss of 25 cents per share vs. positive 8 cents per share in earnings in the same period last year. Bed Bath & Beyond reported quarterly sales of $1.88 billion, which missed the analyst consensus estimate of $2 billion by 6.1%.

Also, the company issued tepid guidance for fiscal year 2021 earnings to come in between a loss of 15 cents per share and flat and expectations for 2021 revenue of $7.9 billion.

PreMarket Prep Action: Off the print and earnings and sales miss, the issue breached the low of the move from Wednesday ($13.32) by a wide margin, falling to $11.90 and then beginning to rebound. Despite the miss on both metrics, investors may have found a silver lining in the guidance.

For whatever reason, the issue rebounded to $15.50 and then immediately retreated to the $14.50 area.

PreMarket Prep's Take On Bed Bath & Beyond: Co-host Dennis Dick, who went long the issue a few days ago in anticipation of a pre-earnings rally that did not materialize, forgot to exit the trade on Wednesday’s close.

In what Dick called “good trading luck,” he was able to exit most of his position at $15.05 during the broadcast Thursday to mitigate his loss.

Dick said he kept a small piece due to the price action being a "good response to a bad report."

The author of this article noted a series of daily highs in the upper $15 handle as a potential resistance area if the issue rebounds again.

BBBY Price Action During The Session: After a $2 higher open ($15.44 vs, $13.37), the issue bolted to $16.35 and sharply reversed course.

The stock was trading 9.91% higher at $14.69 Thursday afternoon. 

The full discussion on the issue from Thursday’s show can he found here: