Shares of Bed Bath & Beyond fell more than 40% in premarket trading on Friday after Ryan Cohen, one of the company’s largest shareholders, sold his entire stake in the home goods retailer.
RC Ventures, Cohen’s investment vehicle, sold 9.45 million shares of Bed Bath & Beyond – nearly 12% of the company – Tuesday and Wednesday between $18.68 and $29.21, filings show. titles on Thursday afternoon. She also sold call options on the shares.
The sale was a boon for Cohen, who bought his Bed Bath & Beyond shares at an average price of $15.34 about five months ago.
Cohen signaled that he intended to exit his position after markets closed on Wednesday. That sent shares of Bed Bath & Beyond down 19.6% during normal trading hours on Thursday. They fell nearly 46% after hours to hit a low of $10.12. In premarket trading on Friday, shares were hovering around $10.60, down about 43%.
The sharp drop in the company’s share price follows weeks of frantic trading at the struggling home goods retailer, reminiscent of the stock market boom that gripped markets during the coronavirus pandemic.
Between the end of June and the end of regular trading on Wednesday, the company’s share price had risen more than 300% – a staggering increase for a retailer that is dangerously cash-strapped.
An earlier disclosure on Monday from Cohen, who is also a co-founder of pet food retailer Chewy, sent the stock up sharply on Tuesday. He revealed that he had bought a large number of call options in Bed Bath & Beyond – derivatives that can generate a windfall if a stock’s value rises.
Bed Bath & Beyond said on Thursday it was “working quickly” with outside financial advisers to strengthen its balance sheet. The company’s most recent quarterly results showed the heavily leveraged retailer had $108 million in cash, up from $1.1 billion in the same quarter a year earlier.
Cohen rocked Bed Bath & Beyond before leaving his post, adding three independent directors and pushing for the sale of his baby brand, which didn’t happen.
Bed Bath & Beyond is the second meme stock targeted by Cohen. He began investing in GameStop through RC in 2020, eventually accumulating a 12.9% stake.
In January, he was named to the video game retailer’s board of directors, which was followed by a 1,500% increase in its share price over two weeks. Cohen oversaw an overhaul of the C-suite and GameStop’s board of directors, of which he became chairman in June.
Cohen isn’t the only Bed Bath & Beyond investor to generate a big gain on trading the stock. On Wednesday, the Financial Times revealed that a 20-year-old shareholder who is still in college made a gain of around $110 million by selling his stake.