Bed Bath & Beyond Appoints 3 New Board Directors

Options bulls are blasting BBBY in response

Deputy Editor
Mar 25, 2022 at 10:18 AM
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The shares of Bed Bath & Beyond Inc. (NASDAQ:BBBY) are up 3.8% at $22.94 this morning. This bull gap came following reports that the company and GameStop (GME) chairman Ryan Cohen appointed three new directors to Bed Bath & Beyond's board of directors, after Cohen criticized the retailer's "overly ambitious" strategy, as well as the overpaying of top executives. The last time we checked on BBBY, Cohen revealed he has a 9.8% stake in the company through his company RC Ventures.

This revelation helped Bed Bath & Beyond stock, which surged past resistance at the $18 level in response. The equity is now struggling with a ceiling at the $25 mark, which has turned down at least three rallies over the past couple of weeks. Year-to-date, BBBY is up 56.3%.

Call traders have continued to build their positions, per the equity's 10-day call/put volume ratio of 6.71 over at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). This ratio stands higher than all but 3% of readings from the past year, and indicates a penchant for bullish bets in the last two weeks.  

That optimism rings true today. So far, 40,000 calls have crossed the tape, which is six times what is typically seen at this point, compared to just 6,711 puts traded. The most popular is the 3/25 25-strike call, followed by the 24-strike call in that series, with new positions being opened at both.

Shorts are also piling on, with short interest up 13.6% in the last two reporting periods. The 27.40 million shares sold short make up 31.6% of BBBY's available float, or over three days' worth of pent-up buying power.


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