Shares of the company were last up 35% at $1.77, on track for their biggest one-day percentage surge since Aug. 8.

As of mid-day, traders had exchanged $114 million worth of the Bed, Bath & Beyond's shares, nearly matching the company's entire stock market value of $157 million, according to Refinitiv data.

Online retail stock forums, including Reddit, have been buzzing about a possible M&A deal, fueling a buying frenzy reminiscent of the "meme stock" phenomenon of 2020, in which shares of troubled companies such as GameStop Corp and AMC Entertainment Holdings soared amid viral interest on forums such as WallStreetBets.

Bed, Bath & Beyond's stock lost nearly half its value last Thursday and Friday after the company warned it may not be able to carry on as a going concern and may have to seek relief through bankruptcy.

Reuters also reported on Thursday the company was preparing to seek bankruptcy protection in coming weeks.

Bed Bath & Beyond has struggled for years with shrinking sales as it competes against Amazon and other rivals, with investors pointing to problems including cluttered stores and an over-reliance on discount coupons. Its shares fell 83% in 2022.

In a filing last week, Bed Bath & Beyond said it expected to show a net loss of $385.8 million for its fiscal quarter ending in November, including $100 million of impairment charges. The company is scheduled to report its results early on Tuesday.

Of the 13 analysts covering the company, three recommend "hold," eight rate the stock "sell," and two have "strong sell" recommendations. The median target price is $2, down from $3 a month ago.