Shares of Bed Bath & Beyond fell more than 40 percent in premarket trading on Friday after Ryan Cohen, one of the company’s largest shareholders, sold his entire stake in the homeware retailer.
Cohen’s investment vehicle, RC Ventures, sold 9.45 million Bed Bath & Beyond Shares — about 12 percent of the company — traded in a range of $18.68 and $29.21 on Tuesday and Wednesday, according to Thursday afternoon securities filings. It also sold call options on the stock.
The sale was a big drop for Cohen, who bought his Bed Bath & Beyond shares at an average price of $15.34 five months ago.
Cohen signaled his intention to leave his position after markets closed on Wednesday. That sent Bed Bath & Beyond shares down 19.6 percent during regular trading hours on Thursday. They fell nearly 46 percent to $10.12 after hours. Shares were down about $10.60, or about 43 percent, in premarket trading on Friday.
A sharp decline in the company’s share price, following frantic trading at the struggling homeware retailer, is a reminder of that. Commemorative stock boom It gripped the markets during the coronavirus pandemic.
As of late June and by the close of regular trading on Wednesday, the company’s stock price had increased by more than 300 percent — a stunning rise for a retailer.
An earlier revelation Monday from Cohen, co-founder of pet food retailer Chevy, sent shares sharply higher on Tuesday. He revealed that he bought a large number of call options on Bet Bath & Beyond – derivatives that can provide leverage if a stock rises in value.
Bed Bath & Beyond on Thursday said it was “working expeditiously” with outside financial advisers to strengthen its balance sheet. The company’s most recent quarterly earnings showed the heavily indebted retailer had $108mn in cash, up from $1.1bn in the same quarter a year earlier.
Cohen shook Bed Bath & Beyond added three independent board directors before he stepped down and pushed for a sale of its baby brand, which didn’t happen.
Bed Bath & Beyond is the second memory stock Cohen has targeted. He began investing in GameStop through RC in 2020, eventually amassing a 12.9 percent stake.
In January he was named to the board of the video game retailer, which saw its share price rise 1,500 percent in two weeks. Cohen oversaw a C-suite and board makeover at GameStop, where he became chairman in June.
Cohen isn’t the only Bet Bath & Beyond investor making big profits trading stocks. Wednesday, the Published by the Financial Times The 20-year-old shareholder, still at university, made a profit of about $110mn by selling his shares.