Short Sellers Crushed as Bed Bath & Beyond Adds to Avis Blow

(Bloomberg) -- A bad week for short sellers is getting worse. 

After suffering a major blow from wrong-way bets on rental-car company Avis Budget Group Inc., bears are facing another setback from Bed Bath & Beyond Inc., with the retailer’s shares surging more than 50% in pre-market trading Wednesday. 

That’s adding to the pain for short sellers, a group that’s almost been driven into extinction amid a rally that caused the S&P 500 to double in 19 months. A Goldman Sachs Group Inc. basket of the most-shorted shares jumped more than 3% for two days in a row, handing bears a stretch of big losses not seen since June. 

The damage has been widespread. During the first two days of the week, one fifth of the members in Goldman’s most-shorted basket are up more than 10%, including MicroStrategy Inc., one of the biggest corporate holders of bitcoin, and media companies FuboTV Inc. and Cinemark Holdings Inc.  

Bed Bath & Beyond jumped after announcing accelerated share buybacks and the launch of a new digital marketplace for merchandise from third-party producers. Short interest accounted for 30% of its shares available for trading, according to data compiled by IHS Markit Ltd. 

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