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The Short Squeeze Unravels: Why these consumer stocks plunged today
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On the fourth day of an epic short squeeze that began with GameStop and spread to other heavily shorted stocks, the surge finally seemed to be falling apart today. Traders began taking profits, and Robinhood, the no-fee brokerage popular with millennial traders, announced this morning that it would disable buying on a number of these high-flying squeezed stocks, only allowing users to close positions.
That news added to the sell-off already in progress with stocks like National Beverage, Fossil Group, and Bed Bath & Beyond. As of 11:15 a.m. EST today, National Beverage stock was down 21.8%, Fossil Group was off 37%, and Bed Bath & Beyond had lost 39.2%.
FOSSIL GROUP INC.
BED BATH & BEYOND INC.
Traders had targeted these stocks because they were small-cap companies with high short interest, making it relatively easy to execute a short squeeze on them. As the chart below shows, all three are still up sharply this year after the squeeze seemed to peak in a surge yesterday.