Build-A-Bear Up Amid Frenzy Over Shorted Stocks, Which It Isn’t
(Bloomberg) -- Many of the stocks riding record gains on the back of Reddit-fueled day trading are among the most shorted, but not Build-a-Bear Workshop Inc.
Short interest for the plush toy retailer, whose trading was briefly halted Wednesday after its share price soared as much as 76%, represents just 4.1% of float -- a far cry from the double- or even triple-digit levels of short interest at other consumer companies whose share prices are surging. The stock price ended the session up 42%, its biggest gain on record.
As is the case with many other stocks undergoing a record surge, fundamentals don’t seem to be behind the run-up. Build-A-Bear took a hit in 2020 as its primarily mall-based stores had to close temporarily or operate in limited capacity due to government mandates. Store closures resulted in a 25% reduction in operating hours for the quarter that ended Oct. 31, the company said in a statement.
Instead, retail traders seem to be flowing into the stock amid heightened discussions on Reddit.
Given its relatively low short interest compared with other popular names this week, some couldn’t help but wonder if it’s a case of mistaken identity: Build-a-Bear, with ticker BBW, looks a lot like Bed Bath & Beyond Inc. (BBBY), which sports some of the highest short interest in retail. Others on Reddit suggested Build-a-Bear’s ticker -- an acronym used crudely in some online circles to discuss women’s bodies -- appeals to a certain subset of young, male traders.
The company didn’t immediately reply to a request for comment.
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