Bed Bath & Beyond stock (NASDAQ:BBBY) closed after hours trading up 67% after announcing a share buy back, totalling $1B. The stock closed yesterday with a price of $16.75 and reached a high in after hours of $32.

Share buy back

The company announced that they had completed a $600M purchase of shares since the end of fiscal 2020. They now expect to buy back a further $400M by the end of fiscal 2021, specifically over the third and fourth quarters. Mark Tritton, Bed Bath & Beyond’s President and CEO commented, “We continue to execute our bold transformation and implement successful strategies that will fortify our near-term and long-term value creation. Today’s announcement further underscores our ongoing confidence in our turnaround, and our ability to simultaneously generate positive cash flow, maintain a strong balance sheet and invest in our long-term growth, all while returning significant capital to shareholders.  We remain committed to our capital allocation framework of delivering strong and sustainable total shareholder return.

They currently had purchased $600M whilst their market cap close yesterday at $1.6B. This has made the stock very bullish for investors which was seen through the high volume buying after the announcement.

Short squeeze

BBBY has previously been part of market short squeezes. Namely in January, when AMC and GME went parabolic, BBBY went from $17 to $53.90. There is a small list of names that all run when one of these short squeezes happen. Among the list are: AMC, GME, EXPR, BBBY, BB and NAKD. They all have a high short percentage, with Wall Street betting against the stock. You can see the top 30 most shorted stocks on the market here, taken from accurate Bloomberg data.

The bullish news led Wall Street and other short sellers to cover their positions as the stock price surged. Around 27% of the share float is shorted by the market.

Business model update and collaboration

Bed Bath & Beyond also announced that they were redefining their business model with the launch of its new digital marketplace to build on the company’s existing authority in key Home & Baby categories.

The company also said they were collaborating with Kroger Co (NYSE:KR), America’s largest grocery retailer, for a strategic move to offer Kroger customers an extensive selection of the most sought-after goods for the home and baby products carried by Bed Bath & Beyond Inc. through, as well as a small-scale physical store pilot at select Kroger Family of Companies stores beginning in 2022.

What to look out for

BBBY should be on your watchlist today for a continued short squeeze. There’s no knowing how high squeezes can go, but the news is very good for the stock long term, so we do not think the move is done here. Also watch out for movement in the stocks listed above, with the key names of AMC and GME already moving in after hours and pre market.

You can find the full company announcement here.

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