Shares of Bed Bath & Beyond fell more than 40 percent in premarket trading Friday after Ryan Cohen, one of the company’s largest shareholders, sold his entire stake in the home goods retailer. home
RC Ventures, Cohen’s investment vehicle, sold 9.45 million shares of Bed Bath & Beyond, nearly 12 percent of the company, on Tuesday and Wednesday between $18.68 and $29.21, according to Thursday afternoon stock statements. He also sold call options on the stock.
The sale was a windfall for Cohen, who bought his Bed Bath & Beyond shares at an average price of $15.34 about five months ago.
Cohen indicated that he intended to exit his position after markets closed on Wednesday. That sent shares of Bed Bath & Beyond down 19.6 percent in regular trading hours on Thursday. They fell nearly 46 percent after hours to a low of $10.12. In premarket trading Friday, shares were around $10.60, or down 43 percent.
The sharp fall in the company’s share price comes after weeks of frantic trading at the struggling home goods retailer, reminiscent of the boom in meme stocks 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 percent, a stunning rise for a retailer that is running dangerously low on cash.
An earlier revelation Monday from Cohen, who is also a co-founder of pet food retailer Chewy, sent the stock higher on Tuesday. He disclosed that he had bought a large number of call options on Bed Bath & Beyond — derivatives that can generate a windfall if a stock rises in value.
Bed Bath & Beyond said Thursday it was “expeditingly working” with outside financial advisors to strengthen its balance sheet. The company’s latest quarterly earnings showed the heavily indebted retailer had $108 million in cash, compared with $1.1 billion in the same quarter a year earlier.
Cohen shook up Bed Bath & Beyond before stepping down, adding three independent directors and pushing for a sale of its baby brand, which failed to materialize.
Bed Bath & Beyond is the second meme stock Cohen has targeted. It began investing in GameStop through RC in 2020, eventually amassing a 12.9 percent stake.
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In January he was appointed to the video game retailer’s board, which was followed by a 1,500 percent rise in its share price over two weeks. Cohen has overseen a makeover of the board and board at GameStop, where he became chairman in June.
Cohen isn’t the only Bed Bath & Beyond investor making a big profit trading the stock. On Wednesday, the Financial Times revealed that a 20-year-old shareholder who is still in college made about $110 million by selling his stake.