Bed Bath and Beyond - Buy the Uncanny Valley and Delete Reddit

LordWrymouth Updated   
NASDAQ:BBBY   Bed Bath & Beyond Inc.
One of the first things you might ask yourself with this call is "How did a bull get stuck in a washer and dryer?"

The people who look more closely might ask "Why is this bull living out of a washer and a dryer?"

The short answer to both of these questions is that the dude listened to Reddit.

I say this in every post about memestocks, but Reddit isn't your friend. It isn't even social media. It's a social marketing and social influencing website masquerading as an organically-created and consensus-driven forum.

Moreover, the Chinese Communist Party's Tencent took a big stake in it many years ago and it spreads all the worst trash of Marxist-Leninsm.

Perhaps if Reddit had have collapsed in bankruptcy then the future would have been a lot brighter for several million young people. Too late for crying now, though.

Scrolling through Reddit is the intellectual equivalent of eating eight or nine bags of potato chips everyday and then complaining that you're fat and girls don't want to marry you.

There are two things Reddit is there for when it comes to trading. One is to condition you to feel that losing money, and a lot of it, is both normal and okay.

It's not.

If you're losing money trading, then you need to fix something, and fast, or just take your money and go buy yourself something nice with it, because you're obviously just gambling and are missing something fundamental in both your understanding and execution.

Wanting to get rich, and quick, will do that.

The second thing Reddit is there for is to indoctrinate your mind with pornography, socialism, Marxism, and atheism, and it happens all while you think you're reading the words and feelings of other people who are just like you.

But they're not just like you. They're not even people.

They're "professional" community organizers who are sitting in a cubicle referencing a flowchart pinned to its grey cushions collecting their $16 an hour and you can't figure it out because they told you that the very idea is a "conspiracy theory."

Bed Bath is this company that sucks and is going bankrupt. Don't believe it? Just go to a store and ask yourself why you're there instead of on Amazon on your phone.

That didn't stop BBBY from yielding 4 and 5 baggers if you happened to buy the bottom and sell the top (you didn't, Ken Griffin's trading desk did, though), and that's exactly the issue.

So the story with BBBY is that Hudson Bay Capital and a bunch of other Wall Street money effectively put a $1 billion blood infusion into Bed Bath. This comes in the form of some convertible preferred stock that has a profitable floor of about 71 cents and a ceiling of about $3.61, according to Bloomberg.

What's 500% among friends? That's what I always say.

So, taking a look at Reddit, there's two really notable things on this stock:

1) In the last two weeks there's almost a total blackout on BBBY from the WallStreetBets pump-and-dump-to-dumb-money brigade.
2) The Bed Bath subreddit has desperate bulls looking for the "MOASS" (Mother of All Short Squeezes), despite it already doing it twice in quick succession (lol, shows you their entry is higher than $5 and $7, doesn't it?), and telling each other to quickly "DRS" (Direct Register, AKA put your BBBY in an off-exchange personal wallet) in an attempt to mess with the float to manipulate Hudson's equity position on their convertible contracts.

After thinking about it for a while, I believe the blackout on BBBY on WSB is because the idea is to not attract the attention of retail buyers to the stock now that "everyone knows" BBBY is going bankrupt.

In other words, the PR company and the people who pay the PR company, who manage Reddit's trading forums, don't want people to buy cheap.

The BBBY forum is acting as mentally ill as it is because bag holders are feeling desperate and dosing a heavy stimpak of hopium.

All of this leads us to believe that, despite the reversal pattern that the short-dumpster to $7 produced, a new all time low is incoming.

After all, Hudson's risk is profitable above 71 cents, Bloomberg says. The ATL is 88 cents. This is 20%, by the way, and 20% is a lot. If you got a 20% move on the Nasdaq while holding a QQQ call you'd make like $4,000 a contract.

The thing to understand is that smart money isn't like you are, who is eternally unhedged and emotionally unstable. Hudson is hedged and really couldn't care less if BBBY goes under 71 cents for a few days because they'll just buy more. And they have a strategy to profit from the plummet in the meantime.

Of course they'll buy more. They obviously see a lot of upside to risk $1 billion on a bankrupt shitco retail chain that was trading at a 2-handle when they donated blood.

So, what kind of upside is there? Well, frankly speaking, the upside is this weird double top left at $30 during the RYAN F'IN COHEN pump and dump last year:

It might sound too good to be true, but look. BBBY short interest ending Jan. 13 and Jan. 31 are both twice as high as it was during the Cohen/Reddit retail rape.

Moreover, according to the most recent institutional holdings filings dated 12/31, only nobody firms sold out of BBBY.

While names like Bank of America and Barclays reduced their positions, bigger and more important names like Blackrock, Vanguard, Morgan Stanley, and Citadel increased their holdings.

Did they not know BBBY was on the verge of bankruptcy and stood to get delisted like Party City just did? Of course they knew. They know what comes three and six months from now, too.

A lot of the same big names decreased their holdings in Party City before the bankruptcy

Another key factor is at Friday's close Bed Bath is only worth like $211 million in market cap. Even a 20 bagger is only $4 billion. A 20 bagger from <$1 is only $2 billion in MCap.

For Bed Bath to go to $30 or $60 in the end requires some crazy fundamental thing, like perhaps Buy Buy Baby really does get split into its own stock, awarded to BBBY shareholders, and you get a Kodak 2020-style candle.

It's hard to say, but if you buy at 60 cents and it goes to $2.4 and you sell it all, who really cares?

Nobody except for Wall Street truly knows either what is going to happen or when it's going to happen.

But for now, it seems to me that the thing that will generate the most alpha for the MMs is to dump BBBY under its $0.88c ATL, probably while Nasdaq and the indexes feign beartown and volatility goes up.

This will cause capitulation from retail bag holders, because that's how retail does it, while the WSB brigade won't buy because they're not being told to buy.

Imo, this is the idea of everything going on right now.

So you can buy the really low prices. But there's a lot of risk. Maybe BBBY goes Chapter 11 and gets delisted and liquidated in receivership, though.

Life is hard and you lose a lot, no matter how you want to gain. You still lose a lot.

Buy a $0.6 handle and try to hold a winner to $30. I dare you.

Frankly speaking, holding a winner is really hard. In some ways it's a lot harder than holding a loser. The way to do it, though, is if you can bag some multiples, is to sell a portion equal to your risk and let the freeroll run until the entire market at large is showing the warning signs of a crash.

Then dump it all and never touch it again.

So, stay safe, lawyer up, hit the gym, and most importantly, delete Reddit.
Look, fellas. No matter how big your bags are, and no matter how "Redditors" swaggle around and clown honk from their iPhones because they're devotedly working for the Marxist cause on the weekend, Bed Bath and Beyond is literally going to zero.

Not only is it going to zero, but remember when Crude Oil traded for -$40/barrel?

BBBY is going to be like that, except the CIA is going to come and arrest everyone on the DRS registry.

So make sure you sell the bottom and buy the peaks, you know, so you can STICK IT TO KEN GRIFFIN. #KenGriffinLied #AMC APE #WeAllInThisTogether #AllPeopleEqual
It's really hard to argue Bed Bath isn't making a new low. It's nice that bag holders brigaded together on Reddit to do "DD," but the more that DD is correct, the more you should expect lower prices, because the guys who have money (not you) buy low and sell high.

The lower they buy and the higher they sell the more private jets and yachts they can have.

My advice to bagholders is: don't capitulate at the bottom.
A $1.40 opening dump and a $1.65 bounce is pretty nice stuff for bulls.

But... if the algorithm was in markup mode (bullish) then price shouldn't have returned to the trendline like this for a second retest.

This (probably) isn't the "retrace 95% and then gogogogo" pattern, and the second spike to $7 is the tell.
I don't know what about this says "buy" to anyone.

Not so bad if you're up to bag hold <$1 prices for a while I guess.
Bed Bath bulls can't understand how they're losing another 4-7% every day.

It's because you're gambling on a MOASS for a bankrupt company while MMs need to get you, and not other short sellers, out of the game.
I got an email from Bed Bath here in Canada the other day announcing they were closing all stores, including Buy Buy Baby.

In my opinion, this completely defenestrates any non-meaningless MOASS theory because the prospect of Baby being split or being a meaningful asset to shareholders was the only hope there was.

All those people who put their shares on direct register to "HODL" are going to lose 100% of their investment.
Grats to Bed Bath bag holders on achieving a new low.

Hope you're comfortable with losing another 50%. Once you capitulate is when it'll rebound.

But from a distressed investing perspective, BBBY is way too early in its rebirth cycle to take a risk on.

Don't forget Party City got delisted and all of those gamblers lost all their money.
Bed Bath is now being quoted at four decimal places like it's some kind of penny stock.

BTW, Nasdaq has a listing requirement that price stays above $1.00 or it gets delisted.

A reverse split can save that, but you still lose money all the same.
There goes the all time low. Another 20% in the dust.

Do you still "like the stock" Disciples of Reddit?
The "going to zero" psychological operation has started.

This likely means you really can buy under 70 cents, even though this thing looks like it should actually just vanish like Party City.

But the trick might be to wait after it goes under 70 and the volatility settles down.

60 cents. I hope you all have "liked the stock" so much that you're good with keeping its remnants in the Roth.

Although I called buying this below the conversion floor, you do need to see a reversal pattern brewing.

Hudson Bay bought a bunch of Silicon Valley Bank before it went face up in the River Styx too.
Oh, I see. The boys at Bed Bath and Beyond voluntarily called off the funding arrangement with Hudson's Bay, saying they'd just kinda prefer to go directly bankrupt.


BBBY will move to the OTC graveyard, I suppose.

Good for all the Disciples of Reddit who moved their shares to the self-registry because Marx told you to.

Hope you learn a lesson from this disaster.
What's another 15% loss in a single day among friends?

Reddit is there to engineer exit liquidity. All that "investing" you did because they told you to "like the stock" just paid for someone to buy another porsche.
With Bed Bath at 30 cents a few days before earnings, I'm sure people are tempted (have been told) to BuY FoR ThE MoASSssSSSSs because of what happened last time.

MMs rarely make the same move twice.

And you should remember that 30 cents to 10 cents is a 66% wipeout of your account. That's the same as if Tesla went to 60 in a day.

10 cents to 3 cents is the same problem, too.
This is some kind of Stairway to Heaven pattern.

Capitulate or HODL to $0.00? Imo, if Buy Buy Baby was going to be the distressed investing moonshot they wouldn't have shut it down in Canada.
Now that Bed Bath literally got delisted and will go to 0 on the OTC, everyone who lost money following Reddit should join a class action lawsuit with Reddit as a Plaintiff.

If you can survive a Motion to Dismiss then you can subpoena Reddit during Discovery and uncover which PR firm is running the WallStreetBets pump and dump train and totally trash and bankrupt that Tencent-owned piece of trash.


The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.