Bed Bath & Beyond shares fell more than 40 percent in premarket trading Friday after Ryan Cohen, one of the company’s largest shareholders, sold his entire stake in a homewares retailer.
RC Ventures, Cohen’s investment vehicle, has sold 9.45 million bed bath behind Shares — roughly 12 percent of the company — on Tuesday and Wednesday ranged between $18.68 and $29.21, according to Thursday’s stock filings. She also sold put options on the stock.
The sale resulted in a surprise gain for Cohen, who bought his shares of Bed Bath & Beyond at an average price of $15.34 about five months ago.
Cohen indicated that he plans to exit his position after markets close on Wednesday. That sent Bed Bath & Beyond shares down 19.6 percent in regular trading hours on Thursday. It fell about 46 percent after hours to a low of $10.12. In pre-market trading on Friday, shares were hovering around $10.60, or a drop of about 43 percent.
The sharp drop in the company’s stock price came after weeks of frantic trading at the struggling home appliances retailer, citing stock boom meme that swept the markets during the coronavirus pandemic.
Between late June and the end of regular trading on Wednesday, the company’s stock price soared more than 300 percent — a staggering rise for the dangerously low-cash retailer.
An earlier disclosure Monday from Cohen, who is also a co-founder of pet food retailer Chewy, led to a sharp rise in inventory on Tuesday. He revealed that he had bought a large number of call options in Bed Bath & Beyond – derivatives that could generate windfall if the stock rises in value.
Bed Bath & Beyond said Thursday that it is “working urgently” with external financial advisors to strengthen its balance sheet. The company’s latest quarterly earnings showed the debt-laden retailer had $108 million in cash, compared to $1.1 billion in the same quarter a year earlier.
Cohen shake Bed Bath & Beyond Before leaving his position, he added three independent directors and pushed the sale of his children’s brand, which didn’t happen.
Bed Bath & Beyond is the second stock meme that Cohen has targeted. The investment in GameStop through RC began in 2020, eventually raising a 12.9 percent stake.
In January, he was appointed to the video game retailer’s board of directors, which was followed by a 1,500 percent increase in its stock price over two weeks. Cohen oversaw Group C and the renewal of the board of directors at GameStop, where he became president in June.
Cohen isn’t the only investor in Bed Bath & Beyond making big gains from stock trading. on Wednesday, and The Financial Times revealed That a 20-year-old shareholder still at the university made a profit of nearly $110 million by selling his stake.
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