Why Are Overstock (OSTK) Shares Soaring Today

Adam Hejl /
2023/06/29 3:32 pm EDT

What Happened:

Shares of online home goods retailer Overstock (NASDAQ: OSTK) jumped 5.28% in the afternoon session after the company announced its name change to Bed Bath & Beyond. It's a bit roundabout, but Bed Bath & Beyond filed for bankruptcy in April 2023. Overstock.com then purchased intellectual property and digital assets but not the stores themselves for $21.5 million and rebranded itself to take on the Bed Bath & Beyond name. Overstock.com's CEO Jonathan Johnson added that "Combining the strengths of the Overstock operational model and the Bed Bath & Beyond brand will create a powerful synergy."

What is the market telling us:

Overstock's shares are very volatile and over the last year have had 46 moves greater than 5%. In context of that, today's move is indicating the market considers this news meaningful but not something that would fundamentally change its perception of the business. The previous big move was 15 days ago, when the stock gained 9.22% on the news that the company bid $21.5 million for Bed Bath & Beyond intellectual property assets such as mobile application rights (stores would not be part of the deal). Some of the assets potentially acquired in the deal could help to realize cost-effective ways to boost sales and improve customer acquisition. Competing bids are due Friday, June 16, 2023.

Overstock is up 60.1% since the beginning of the year, but at $30.26 per share it is still trading 11.3% below its 52-week high of $34.13 from August 2022. Investors who bought $1,000 worth of Overstock's shares 5 years ago would now be looking at an investment worth $898.07.

Is now the time to buy Overstock? Access our full analysis of the earnings results here, it's free.