Aug 19 (Reuters) – Retail favorites GameStop and AMC Entertainment fell on Friday, reversing much of their recent gains after billionaire Ryan Cohen abruptly dumped his stake in struggling retailer Bed Bath & Beyond a few days after taking a bullish option position.
Shares of Bed Bath & Beyond Inc (BBBY.O) extended their slide, falling 42% to $10.80, after Cohen said a day earlier he had sold his 9.8% stake in society, nearly five months after hoarding it and pushing for change. Read more
Selling the stake could result in a windfall of between $55 million and $60 million for Cohen, according to a Reuters review of regulatory filings. Read more
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Shares of Bed Bath & Beyond soared to $30 earlier this week after Cohen bought call options on Tuesday, rising from $4.38 in July in frantic trading that conjured up memories of the meme stock rally from the beginning of 2021.
If the losses continue, the title should swallow its weekly gains of 43%.
“Had it not sold, this stock seemed to have real potential as a GME 2.0. Selling Ryan unfortunately killed all momentum,” said a trader who had invested in Bed Bath & Beyond when the stock was $6.
Cohen owns a roughly 12% stake in GameStop Corp (GME.N), which at the height of the retail frenzy in January 2020 had surged 1,600%, and is the largest shareholder.
GameStop and AMC Entertainment (AMC.N) fell between 4% and 6%. E-commerce company Vinco Ventures (BBIG.O) fell 17%.
Despite Friday’s losses, stocks are up in the range of 3% to 55% this month.
“This latest roller coaster is not likely to extinguish the trend in stocks memes,” said Susannah Streeter, senior investment and market analyst, Hargreaves Lansdown, adding that the urge to ride the wave of speculation has gained momentum. ground as Wall Street rallied in recent weeks.
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Reporting by Anisha Sircar, Susan Mathew and Bansari Mayur Kamdar in Bengaluru; Editing by Shinjini Ganguli
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