Despite analyst warnings about “unrealistic” valuations, shares of Bed Bath & Beyond surged up to 70% on Tuesday as retail investors from Reddit’s WallStreetBets piled into the stock after being encouraged by yet another big purchase from activist investor and GameStop chairman, Ryan Cohen.
Bed Bath & Beyond’s stock surged by as much as 70% during trading on Tuesday before paring back gains somewhat, still finishing the day more than 29% higher to trade at nearly $21 per share.
The stock was halted several times for volatility amid record trading volumes, which reached as much as 188 million shares before noon EST (the company only has roughly 80 million shares outstanding).
Bed Bath & Beyond’s stock got a massive boost thanks to an army of retail investors on social media sites like Reddit who snapped up shares: The ticker BBBY was the most popular mention in the WallStreetBets chat room on Tuesday, according to data provider Quiver Quantitative.
Meme stock traders drove up the share price yet again following news that GameStop chairman Ryan Cohen, who owns a more than 10% stake in Bed Bath & Beyond, purchased call options on more than 1.6 million shares.
Retail investors interpreted the move as a vote of confidence, since the strike prices on Cohen’s call options range between $60 and $80—meaning that he is essentially betting that Bed Bath & Beyond’s stock can rise to those levels.
Shares have surged more than 80% in the last three days alone, even amid fresh warnings about the company’s business prospects from Wall Street analysts, the majority of which maintain a “sell” rating on the stock, according to FactSet data.