Why Bed Bath & Beyond Is Soaring Today

What happened

Shares of Bed Bath & Beyond (NASDAQ:BBBY) are soaring 20% higher at 11:11 a.m. ET on Tuesday on a day when the S&P 500 is up 41 points, or just over 1%, in comparison.

The surge in the home goods retailer's stock follows a report in The Wall Street Journal this morning noting Bed Bath & Beyond, along with other troubled retailers, has secured financing in recent weeks to make it through the holiday season.

Image source: Getty Images.

So what

While the Christmas shopping season is expected to see sales rise compared to last year, as much as 4% to 6%, inflation is ravaging consumer wallets. Even Amazon's recent second Prime Day sale, called the Prime Early Access Sale, was a relatively muted event compared to the summer extravaganza. Many sellers reported only low-priced goods were moving and sales were only up 15% versus a typical, non-sales-event Tuesday and Wednesday.

Yet the Journal story wasn't all that positive for Bed Bath & Beyond, pointing out that retailers such as it and Tuesday Morning were "among those most at risk of running short of cash without stellar holiday sales," according to analysts.

It did note that Bed Bath & Beyond had increased its credit line last month so that it now has some $1 billion in liquidity available to it.

Now what

Almost 40% of Bed Bath & Beyond's stock is still sold short, making it one of the most heavily shorted stocks on the market, meaning any positive movement could result in short-sellers covering their positions. While the move is not one necessarily related to a short squeeze, the home goods retailer only needs a few additional good news reports and one could quickly materialize.

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