Bed Bath & Beyond has gained in 14 out of the past 15 sessions, helping the home goods company's market value more than quadruple to over $2 billion. The stock was last trading at $25.93 after rising up to $30 earlier in the session.

"It truly is a quality company (but) shares are probably overvalued in the low teens and it is ridiculously overvalued at high $20s," said Jake Dollarhide, chief executive officer at Longbow Asset Management in Tulsa, Oklahoma.

Retail investors net bought $73.2 million worth of the company's shares on Tuesday, the highest single-day purchase in at least five years, according to Vanda Research's retail trade flows data, as a filing showing activist investor Ryan Cohen's long-term call option purchases enthused retail punters.

Bed Bath & Beyond was the most actively traded single stock option on Wednesday, far ahead of popular options trades including Apple Inc and Tesla Inc, data from Options Clearing Corp showed.

The resurgence in retail trading comes after a rebound in U.S. stocks that helped the S&P 500 recoup more than half of the benchmark's losses since its June low.

Among others, e-commerce firm Vinco Ventures advanced 36% and meal-kit delivery firm Blue Apron rose 11.5%.

About 51% of Bed Bath & Beyond's free float shares are shorted, while Vinco Ventures and Blue Apron have 17% and 37% of their public shares under short position respectively, according to Ortex.

"You are only seeing meme stocks come back because the stock market has rebounded. A rising stock market lifts all boats," Dollarhide said. (Reporting by Medha Singh in Bengaluru; Editing by Maju Samuel)