TLDR: BNED is up ~75% today and shows strong potential to continue rising, driven by retail investor momentum similar to GME and AMC. With high short interest and a reduced free float, the stock is primed for a short squeeze. Recent strategic initiatives and potential transactions add to the bullish outlook, and we estimate BNED could reach a share price between $8 – $12 if the current momentum continues into the coming weeks – similar to how we’ve seen historic meme plays play out. And with BNED having striking similarities to GME and AMC being a household name, we believe a meme-like run has only begun for the well-known bookstore.
Barnes & Noble Education, Inc. (BNED) is capturing the market’s attention with its recent dramatic price increase. Up about 75% today, BNED is demonstrating characteristics similar to previous meme stocks like GameStop (GME) and AMC Entertainment (AMC). These similarities, combined with strong market momentum and strategic developments, suggest that BNED’s upward trend could continue. Let’s delve into why BNED might be on its way to becoming the next big meme stock and why its price might keep climbing.
Retail Investor Momentum
The surge in BNED’s stock price is largely driven by retail investors. Similar to the GME and AMC phenomena, BNED has become a topic of interest on social media platforms like Reddit, where retail investors coordinate buying efforts to challenge institutional short sellers. This collective action can drive substantial price increases, as seen today, and may continue to propel BNED’s stock higher if the momentum is maintained.
Historical Price Context
During the COVID-19 lockdowns, BNED reached a share price of $12.01. With the current market interest and retail momentum, it’s plausible that BNED could see significant gains again. Analysts estimate that BNED’s share price could conservatively reach between $8 and $12 if the current buying momentum continues. This historical context provides a reference point for potential price targets, encouraging more investors to jump on board.
High Short Interest and Limited Free Float
BNED has a high short interest, with 24 million shares shorted out of a float of approximately 34 million shares. The significant bearish bets against the stock make it a prime candidate for a short squeeze. Additionally, Greenhaven Associates’ recent acquisition of over 4.8 million shares has reduced the free float to around 4 million shares, further tightening the supply. This limited availability of shares amplifies the squeeze potential as short sellers rush to cover their positions.
Potential Strategic Transactions
Greenhaven Associates is exploring a potential transaction with BNED valued at over $500 million. This possible deal underscores strong confidence in BNED’s future prospects and has sparked significant market interest. The anticipation of such a strategic transaction adds to the bullish sentiment, encouraging more investors to buy in anticipation of positive news.
Positive Analyst Projections
BNED’s current trading price shows significant potential for upside. Analysts have set an average price target of $2.73, representing a potential gain of nearly 875%. Some projections even suggest the stock could exceed $4, indicating gains of up to 1,330%. These optimistic projections are likely to attract more investors, contributing to sustained buying pressure.
Strategic Initiatives and Financial Position
BNED has undertaken several strategic initiatives aimed at enhancing its financial position, including a $95 million investment and the implementation of a short-term poison pill. The company’s focus on digital education solutions and cost-reduction strategies is expected to improve profitability, making the stock more attractive to investors.
Broader Market Sentiment and Meme Stock Characteristics
The broader market sentiment, particularly among retail investors, is highly favorable for stocks with meme-like characteristics. BNED, with its household name and recent market activity, fits well into this category. The excitement and community-driven buying that propelled stocks like GME and AMC could similarly boost BNED.
Conclusion
Barnes & Noble Education, Inc. (BNED) is showing strong potential to continue its upward trajectory and become the next big meme stock. Driven by retail investor momentum, high short interest, strategic initiatives, and positive market sentiment, BNED’s stock price could see substantial gains. While the current momentum is promising, investors should remain aware of the risks associated with such speculative investments. Nonetheless, BNED presents an intriguing opportunity for those looking to capitalize on the next potential short squeeze and meme stock rally.