Shacknews has been covering GameStop stock news since long before the events of early 2021 when the shares shot up 400% in a single month. As a media outlet doing our very best to provide factual financial news information, the ensuing flood of so-called "meme stocks" has created an enormous amount of static when trying to vet potential story leads that are coming from someone on Reddit or Twitter. The "meme stock" term has been conflated with the ongoing turnaround efforts at GameStop in an effort to market risky securities to investing novices and undermine what began as a populist Internet movement.
![Screenshot of Yahoo! Finance grouping GameStop stock with AMC and Bed Bath & Beyond stocks.](https://d1lss44hh2trtw.cloudfront.net/resize?type=webp&url=https%3A%2F%2Fshacknews-www.s3.amazonaws.com%2Fassets%2Feditorial%2F2023%2F04%2Fgamestop-gme-stock-bbby-bankrupt-meme-stock-smoke-screen-yahoo.png&width=986&sign=4ZyYeTgKRkbMGF3SlpAez4QQ6suucufMxgTOlNbZ2Z4)
Source: Yahoo! Finance
In a world where "trust me bro" is a source for many individuals on the Internet, the recent rumors swirling around Bed Bath & Beyond (BBBY) really had me shaking my head in disbelief. Despite numerous red flags, many investors and traders were tricked into buying shares of BBBY by countless shills across various social media channels. Like the penny stock swindlers of the past, many stocks labeled "meme stocks" in 2023 are nothing but blackholes where investment capital goes to die. So I say good riddance to Bed Bath & Beyond, and power to the players. The mainstream media has one less penny stock to slap its "next GameStop" narrative onto.
![Screenshot of a crazy r/BBBY subreddit rumor of a GameStop acquisition.](https://d1lss44hh2trtw.cloudfront.net/resize?type=webp&url=https%3A%2F%2Fshacknews-www.s3.amazonaws.com%2Fassets%2Feditorial%2F2023%2F04%2Fgamestop-gme-stock-bbby-bankrupt-meme-twittermisinformation-acquisition.png&width=986&sign=WBEDJVVaKZ-JFKAT3D9PQSmgO1HnSCr0fD2BrPlBkFk)
Source: r/BBBY
GameStop Chairman of the Board Ryan Cohen is not free from blame
A sad truth of Bed Bath & Beyond's "meme stock" status is that GameStop's Chairman of the Board Ryan Cohen arguably started the frenzy when he disclosed a BBBY stake on March 7, 2022 and pushed for corporate leadership changes. Some investors who had just witnessed the power of Ryan Cohen as an activist investor play out at GameStop joined the fund manager in buying Bed Bath and Beyond shares, which at the time had rocketed to $30/share. After failing to reach any agreements wtih BBBY's board, Cohen exited his position on August 18, 2022. The stock fell 34% on that news, but that was just the beginning of the pain for shareholders.
![A meme of GameStop Chairman of the Board Ryan Cohen made to look like he is a chair.](https://d1lss44hh2trtw.cloudfront.net/resize?type=webp&url=https%3A%2F%2Fshacknews-www.s3.amazonaws.com%2Fassets%2Feditorial%2F2023%2F04%2Fgamestop-gme-stock-bbby-bankrupt-meme-stocks-ryan-cohen-chairman.png&width=986&sign=Fkt8TRB0Q3W5dEb768xkoXj01xr9KfMjir0Tw2f5CrU)
Source: u/ButtFarm69
It would stand to reason that someone who followed Ryan Cohen into BBBY stock would also follow him out when he sold, but that is sadly not what happened. Rumors began to swirl on Twitter and Reddit that Cohen was going to acquire all or part of Bed Bath & Beyond. Some of these rumors even claimed that GameStop would acquire Bed Bath & Beyond. Each weekend, the same people would post tinfoil hat theories for why "the merger will be announced Monday." Countless Mondays have passed, and BBBY shareholders are left holding the bag.
Social media being used to slow down the Reddit Rebellion
![Screenshot of Twitter's Top Page search results for $GME that shows a tweet with GME investor Keith Gill alongside $BBBY $AMC #squeeze #acquisition and more non-GameStop information.](https://d1lss44hh2trtw.cloudfront.net/resize?type=webp&url=https%3A%2F%2Fshacknews-www.s3.amazonaws.com%2Fassets%2Feditorial%2F2023%2F04%2Fgamestop-gme-stock-bbby-bankrupt-meme-twittermisinformation-keith-gill.png&width=986&sign=4X7BA79jaCgDq_wOrLgrBWJjMrncq8f4zP2HaqJfG58)
Source: Twitter
Over the past year, many tweets have tagged $GME alongside information that has nothing to do with the stock. This has been going on with AMC since January 2021, but the addition of $BBBY provided shills with a great way to get even more misinformation in front of the eyes of existing and potential GameStop investors. One of the truly amazing conclusions that can be drawn from the GameStop short squeeze of January 2021 is that a movement can occur when small investors pool their assets together.
The "meme stock" label and "next GameStop" rhetoric from mainstream media coverage as well as social media shills has undoubtedly divided the capital available to take over GameStop's share float. Despite these headwinds, GameStop shareholders own a stock that is up nearly 10% for the year 2023 with nearly 200,000 individuals holding directly registered shares. The video game retailer is essentially debt-free after raising capital in 2021, something that the Bed Bath & Beyond board didn't do when given multiple opportunities in 2022.
If on Monday you don't liquidate your $BBBY to buy $GME, you will effectively obliberate yourself from the market. It was nice knowing you.
— Professor (@shortdestroyer) April 23, 2023
Protip: try blackjack next time.
There is no "next GameStop."
Bed Bath & Beyond highlights how damaging it can be to chase the "next GameStop." The reason that GME investors survived the last few volatile years is because the investment was founded on a strong fundamental thesis laid out publicly by Keith Gill. GameStop's new board has to continue to execute, but investors are on somewhat more solid ground following the surprise profit reported in Q4 2022. Much of what has driven these other so-called "meme stock" investments has been an optically or objectively low share price.
![Screenshot of a r/BBBY poster saying they are buying more BBBY shares even after the news that company is filing for Chapter 11 bankruptcy.](https://d1lss44hh2trtw.cloudfront.net/resize?type=webp&url=https%3A%2F%2Fshacknews-www.s3.amazonaws.com%2Fassets%2Feditorial%2F2023%2F04%2Fgamestop-gme-stock-bbby-bankrupt-meme-stock-reddit-dumb.png&width=986&sign=NzxHkqouuLbefhla91Gypv_pdS2ddPpJtyYKHj1-mCo)
Source: r/BBBY
America has a gambling problem
The United States has entered an era of extreme risk-taking that began during the COVID lockdown of 2020. Many states have legalized app-based gambling, and Robinhood broke new ground allowing investors and traders to buy fractional shares of companies. While some of the innovations Robinhood introduced have been broadly adopted in the market, Wall Street participants have been given a great opportunity to sell the next get rich quick stock. Penny stock swindlers are not new to markets, but the 2020s have witnessed bubbles in extremely illiquid assets like crypto tokens and NFTs. The same anti-short seller attitude that drove the original short squeeze in GME has been repurposed by brokers, dealers, media outlets, social media to sell extremely risky marketable securities.
With AMC currently trading below $5/share and BBBY now trading for less than 20 cents/share, it is very important for novice investors and traders to realize that share price does not matter when making investment decisions. You can and will lose 100% of a stock trading at $1/share just as fast as you can lose 100% of stock with a $100/share price. Learn more about the companies before you buy into their stocks. Find out how much debt they have. Is it serviceable? Are they going to have to raise capital and dilute shareholders? These fundamental questions can prevent more capital from being destroyed.
![A daily time period bar chart of Bed Bath and Beyond's stock that shows its one-year decline from $30/share to less than $1/share.](https://d1lss44hh2trtw.cloudfront.net/resize?type=webp&url=https%3A%2F%2Fshacknews-www.s3.amazonaws.com%2Fassets%2Feditorial%2F2023%2F04%2Fgamestop-gme-stock-bbby-bankrupt-meme-stock-chart.png&width=986&sign=eUAVGT2-eaL_YaMeoc4grgPUGXgr7KwQt024d-anqr0)
Source: TC2000
There are people who got hurt by Bed Bath & Beyond's bankruptcy who didn't know any better, but Wall Street simply does not care. The attitude that fueled the GME movement in 2021 continues to be rebranded by questionable players in and around the stock market. Perhaps people will think twice the next time they hear "this could be the next GME."
This article is only meant for educational purposes, and should not be taken as investment advice. Please consider your own investment time horizon, risk tolerance, and consult with a financial advisor before acting on this information.
Full Disclosure:
At the time of this article, Shacknews primary shareholder Asif A. Khan, his family members, or his company Virtue LLC had the following positions:
Long GameStop via GME shares (partially hedged with out-of-the-money put options)
-
Asif Khan posted a new article, Bed Bath & Beyond's (BBBY) bankruptcy is a blessing for GameStop (GME) investors