Bed Bath & Beyond shares soared on Tuesday as retail traders active on social media piled into the stock, encouraged by news that GameStop chairman Ryan Cohen placed another bet on the struggling retailer.

Shares of Bed Bath & Beyond skyrocketed more than 70% to an intraday high of $28.04 in midday trading Tuesday amid multiple trading halts due to volatility.

A regulatory filing Monday evening showed that Cohen's venture capital firm RC Ventures bought distant out-of-the-money call options on more than 1.6 million Bed Bath & Beyond shares with strike prices between $60 and $80.

Investors profit from calls when the underlying securities rise in prices. The strike price is where the security can be bought by the option holder, meaning Cohen is betting that Bed Bath & Beyond can rise as high as $80 a share. The stock closed Monday at $16.

The call options that Cohen purchased expire in January 2023.

The new purchase grabbed the attention of retail traders on Reddit's WallStreetBets forum. The ticker BBBY became the most popular mention on the chat room Tuesday, according to alternative data provider Quiver Quantitative.

Cohen first revealed he held a nearly 10% stake in Bed Bath & Beyond through RC Ventures in early March. FactSet says his holdings amounted to 11.82% as of late March.

At the time, the GameStop chairman wrote a letter to Bed Bath's then CEO Mark Tritton saying he believed the home goods chain was struggling to reverse market share declines and navigate supply chain woes. He also urged the retailer to consider selling its Buybuy Baby chain.

Later in March, Bed Bath said it struck a deal with the activist';s firm to add three people chosen by Cohen to its board of directors, effective immediately.

Just three months later, Bed Bath abruptly replaced Tritton as CEO in June, naming restructuring expert and independent director Sue Gove as his interim replacement. This came after the company suffered another quarter of sluggish sales and heavy losses. 

Now under Gove, Bed Bath is trying to turn the ailing business around, but analysts remain unsure it will succeed. The company is discontinuing one of the in-house brands created under Tritton, CNBC reported earlier this month, and there could be more to come.

Creating in-house brands for bedding and kitchen accessories was core to Tritton's turnaround plans, which he took from his experience at Target. But he ended up stripping Bed Bath of items that customers were looking for and investing heavily in things that didn't sell as well.