Bed Bath & Beyond Stock Sheds 20% Following CEO's Departure

Options volume is running at seven times the intraday average

Deputy Editor
Jun 29, 2022 at 10:18 AM
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A major c-suite shakeup has shares of Bed Bath & Beyond Inc. (NASDAQ:BBBY) trading at more than two-year lows this morning. Specifically, BBBY was last seen down 20.9% at $5.17, after the retailer announced the departure of CEO Mark Tritton, with Sue Gove, an independent director on the company's board, set to take over as interim chief executive. Tritton's departure comes after the company today reported fiscal first-quarter losses of $2.83 per share on revenue of $1.46 billion -- both of which missed analysts' estimates by considerable margins -- as well as a 24% drop in same-store sales.

As a result of today's negative price action, Bed Bath & Beyond stock now sports year-over-year and year-to-date deficits of 82.7% and 64.5%, respectively. Since early April, the 20-day moving average has guided the security down the charts, and BBY is now pacing for its third-straight monthly loss.

Options traders have favored bullish bets in the last 10 weeks, per Bed Bath & Beyond stock's 50-day call/put volume ratio of 5.84 over at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). This ratio stands higher than all other readings from the past year, and an unwinding of this optimism could cause additional headwinds to roll in.  

That shift in sentiment already looks to be taking place, as the first hour of trading shows 23,000 puts already exchanging hands -- 22 times the intraday average. Call volume is still noteworthy, however, with 21,000 of these contracts traded so far, respresenting six times what's typically seen at this point. The most popular contract is the weekly 7/1 5-strke put, followed by the 5.50-strike call in the same weekly series, with positions being opened at both.

 

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