The current meme stock rally has Bed Bath & Beyond shares surging amid bankruptcy speculation while Party City's stock slides lower.
SEANA SMITH: Let's take a look at the meme stocks-- Bed Bath & Beyond rallying once again today. The meme stocks are back in favor with retail investors. Taking a look at one of the leaders here as we pull up an equal weight chart-- Bed Bath & Beyond up just about 52%.
That's the third day in a row of gains. A broader risk-on sentiment here fueling this rally. Another hard-- it's very hard to make sense, though, of some of the action that we've seen in the name, especially just take a look at Bed Bath & Beyond-- I mentioned the huge uptick that we're seeing in the name today. The chart is now pulling up.
But over the last couple of days, we certainly have seen this momentum to the upside. We're looking at gains of just over 141%. Indeed, this is a name that said that it was going to or likely might be forced to file for bankruptcy. Not a strong investor thesis or something you would want to say in order to get investors on board. Retail traders, though, don't seem to be spooked by that.
They're buying that. They're also buying AMC. They're buying GameStop here among the winners in this meme trade today.
DAVE BRIGGS: Yeah, and you'd search for some reason, you search for some why did they do this-- look, initially, Bed Bath & Beyond surged on the layoffs, which could actually be a justification. But those layoffs, clearly, are not enough to save Bed Bath & Beyond, which is going to close around 150 stores and it's clearly going to file at some point.
So this is just your typical meme trade. We thought those retail traders were going to go to the sidelines in 2023, but that's the other big picture takeaway is they appear to be back-- not just the stocks that are popping. Party City's the big one that's surprising to me. Is it now a meme stock, Seana? It was up 118% earlier, I think it was Tuesday, and now it's plunged right back down-- it another rumor that they could file.
SEANA SMITH: Yeah, I mean, it certainly has been trading like a meme stock. And when you take into account so much interest in that name when the future, at least, the next several months, next year or two, seems to be-- or likely will be extremely challenging here for this company. It's also very important for investors to realize, retail traders, that when you're betting on names like this, names that are in bankruptcy, names that are saying that they could file for bankruptcy, it's a real risk here because if, in fact, they do file for bankruptcy, a lot of times, those retail traders are the last ones to be paid out during that chapter 11 process.
So you could potentially leave a lot of money on the table-- also, not to mention the fact that, really, it's hard to make sense in terms of how these names are trading, how they are going to be trading in the future. So you've got to be ready to lose all the money that you're pouring in.
DAVE BRIGGS: And you also got to peel back and look at Party City right now is trading at $0.31 a share. So we're not talking about a $20 or $30 stock. We're talking about a penny stock, virtually. There was a report out of "Axios" that suggested Franchise Group could buy them, take them over. And that was responsible for a bit of a rally.
But ultimately, my favorite reference earlier was this is not a meme stock rally, this is a nonsense rally. And that's what it feels like it is.
SEANA SMITH: That's the best way to put it-- a nonsense rally.
DAVE BRIGGS: All right, good stuff. Thank you, Seana.