Hedge Funds Were Right About These 5 Sinking Stocks

3. Bed Bath & Beyond Inc. (NASDAQ:BBBY)

Number of Hedge Fund Shareholders: 15

Year-to-Date Returns: -27%

There’s been a drop in hedge fund ownership of Bed Bath & Beyond Inc. (NASDAQ:BBBY) over four of the last five quarters, the other quarter being flat. All told, there’s been a 56% decline in the number of funds long BBBY over the past five quarters. Jonathan Soros’ JS Capital and David Harding’s Winton Capital have been among the many BBBY sellers.

Meme stock buyers appear to be trying to mess with hedge funds again, as they have driven up the price of Bed Bath & Beyond Inc. (NASDAQ:BBBY) by about 20% this week on no fundamental news. Shares are still down by over 60% in 2022 however. Bed Bath & Beyond’s comps imploded by 27% in its fiscal Q1, as the company loses market share in the shrinking home furnishings niche.

Even after axing over 500 of its underperforming stores, there is plenty of work left to be done for Bed Bath & Beyond Inc. (NASDAQ:BBBY), whose adjusted gross margin has plunged by 12.1 percentage points to 23.8% over the past two quarters. The company is bleeding money, losing about $1 billion in cash and equivalents from the end of last May until a year later, which has left the company with just over $100 million and prompted it to reach out to private credit providers.