Short squeeze at BBBY? What has to happen for that

Dusseldorf US stocks such as the video game retailer Gamestop, the cinema chain AMC Entertainment and the household goods retailer Bed Bath & Beyond (BBBY) are currently experiencing a comeback. The shares were pushed up by private investors organized in online forums in spring 2021, and a new rally could start now.

On Wednesday, prices rallied sharply with no discernible trigger — most notably Bed Bath & Beyond, which was up 69 percent. The company warned on January 5 that it might have to file for bankruptcy. AMC titles were up 21 percent and Gamestop were up 7 percent.

One possible reason for the rally is that retail investors are betting that short sellers will unwind their bets on a falling price, thereby driving the stock. In stock market jargon this is called a “short squeeze”. In the case of Bed Bath & Beyond, however, it is difficult to trigger such an event, according to an analysis by the financial data provider S3 Partners.