Bed, Bath & Beyond, Blue Apron Skyrocket In Latest Short Squeeze: What Investors Need To Know

The short squeeze trade is back in full effect, and the newest meme stocks catching fire are Bed Bath & Beyond Inc BBBY and Blue Apron Holdings Inc APRN.

Bed, Bath & Beyond has become the latest favorite ticker of Redit's WallStreetBets community, the subreddit largely responsible for huge surges in heavily shorted stocks AMC Entertainment Holdings Inc AMC and GameStop Corp. GME in 2021.

Related Link: AMC, GameStop Are Running Again: What's Behind The Latest Meme Stock Rally?

Latest Ryan Cohen Meme Stock: One common thread between GameStop and Bed, Bath & Beyond is Chewy Inc CHWY co-founder Ryan Cohen.

Cohen is chairman of the GameStop board of directors, and his RC Ventures has a 12% ownership stake in Bed, Bath & Beyond.

Cohen reportedly played a large role in the departure of former Bed, Bath & Beyond CEO Mark Tritton in June.

Bed, Bath & Beyond is one of the most heavily shorted stocks in the market after reporting a 25.1% drop in revenue and a $357.6 million net loss in the most recent quarter. Roughly 51.2% of the stock's float is currently held in short positions, according to Ortex Analytics.

Bed, Bath & Beyond shares jumped another 21% in early trading on Wednesday and are now up a whopping 400.5% in the past month, applying extreme pressure to short sellers.

Related Link: New Congressional Report On GameStop Trading Frenzy Cites 'Troubling Business Practices, Inadequate Risk Management'

Blue Apron Is Cooking: Blue Apron has been one of the most disastrous IPOs in recent years. The company went public at an IPO price of $10 in June 2017. Over the last five years, the stock has lost 92.5% of its value.

In the most recent quarter, Blue Apron reported a net loss of $23.1 million and revenue growth of less than 0.2%. Ortex estimates Blue Apron currently has a short percent of float of about 37.1%. After another 9% gain on Wednesday morning, the stock is now squeezing short sellers with a 66.5% overall gain in the last month.

Benzinga's Take: Whatever the reason, something appears to have triggered a massive short squeeze, and both Bed, Bath & Beyond and Blue Apron have plenty of shorts to squeeze.

Traders should be extremely careful trying to time the squeeze and any potential pullback. Short squeezes are notoriously volatile and unpredictable, even to some of the most experienced stock traders.

Photo via Shutterstock.