Wayfair Stock Surges After Job Cuts

The stock is still lower since the start of the year, however

Deputy Editor
Jan 19, 2024 at 10:45 AM
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The shares of Wayfair Inc (NYSE:W) are surging today, after the furniture retailer announced it was cutting 13% of its workforce, or 1,650 employees, in its latest restructuring plan. The company expects annual cost savings of over $280 million from the move, which is the latest in a string of cost-saving initiatives since August 2022. 

At last glance, W was up 11.3% at $56.66. The jump hasn't completely erased its 2024 deficit of 8.3%, though it does have the stock jumping above the 10-day moving average, which has guided the shares lower since the start of the year. The $50 level, which provided a ceiling of pressure in November, has remained supportive since December. 

Over in the options pits, 14,000 calls and 11,000 puts have been exchanged so far, which is four times the overall volume typically seen at this point. The Match 60 call is the most popular, followed by the weekly 1/26 55-strike call, with new positions being opened at the latter. 

Calls have been much more popular than usual over the past couple weeks. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), Wayfair stock's 10-day call/put volume ratio of 1.55 ranks higher than all other readings from the past year. 

It's also worth noting that short interest represents a healthy 24.3% of the stock's available float, or nearly five days' worth of pent-up buying power. Plus, W's 14-day relative strength index (RSI) of 17.4 sits firmly in "oversold" territory, which is typically indicative of a short-term bounce. 

 

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