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Bed Bath & Beyond shares plummet after Ryan Cohen confirms stake sale

Shares of Bed Bath & Beyond plunged more than 45 percent in after-hours trading on Thursday after Ryan Cohen, one of the company’s largest shareholders, sold his entire stake in the home clothing retailer.

RC Ventures, Cohen’s investment vehicle, sold $9.45 million bed bath beyond Shares — nearly 12 percent of the company — between $18.68 and $29.21 on Tuesday and Wednesday, according to securities filings. It also sold call options on the shares.

The sale resulted in a windfall for Cohen, who bought his shares of Bed Bath & Beyond about five months ago at an average price of $15.34.

Cohen signaled he intended to exit his position after markets closed on Wednesday. That sent Bed Bath & Beyond shares down 19.6 percent during normal trading hours. They fell another 45.98 percent to $8.43 after hours.

The sharp drop in the company’s share price follows weeks of frenzied trading at the struggling homewares retailer, which is reminiscent of the Meme stock boom that gripped the markets during the coronavirus pandemic.

Between the end of June and the end of regular trading on Wednesday, the company’s share price was up more than 300 percent — a stunning rise for a retailer dangerously short on cash.

An earlier publication Monday by Cohen, who is also a co-founder of pet food retailer Chewy, sent shares higher Tuesday. He announced that he had bought a large number of call options in Bed Bath & Beyond – derivatives that can bring a windfall if a stock rises in value.

Bed Bath & Beyond said Thursday it was “working expeditiously” with outside financial advisers to strengthen its balance sheet. The company’s most recent quarterly results showed that the heavily indebted retailer had $108 million in cash, compared to $1.1 billion in the same quarter last year.

Kohen shocked Bed Bath & Beyond before leaving his position, adding three independent board members and pushing for the sale of its baby brand, which didn’t happen.

Bed Bath & Beyond is the second meme stock Cohen has targeted. He started investing GameStop over RC in 2020, eventually accumulating a 12.9 percent stake.

In January, he was appointed to the video game retailer’s board of directors, and its stock price rose 1,500 percent in two weeks. Cohen has overseen an overhaul of the C-suite and board of directors at GameStop, where he became chairman in June.

Cohen isn’t the only Bed Bath & Beyond investor to make a big profit from trading the shares. On Wednesday, the Financial Times revealed that a 20-year-old shareholder, who is still at university, made about $110 million in profit from the sale of his stake.

https://www.ft.com/content/93942b93-e0b5-46ca-80ae-cf166498ba4a Bed Bath & Beyond shares plummet after Ryan Cohen confirms stake sale

Adam Bradshaw

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