Bed Bath & Beyond: Ryan Cohen’s plan to sell stake fuels rout
BNN Bloomberg
Five months after disclosing a stake in Bed Bath & Beyond Inc., activist shareholder Ryan Cohen wants out, sparking a selloff in the shares of the home goods retailer.
The Union, New Jersey-based company slumped as much as 22 per cent to US$18.03 on Thursday after Cohen’s RC Ventures said in a filing with the U.S. Securities and Exchange Commission that it might sell as many as 7.78 million shares of Bed Bath & Beyond, along with some call options.
The company has been a favorite among so-called meme stocks, surging more than 400 per cent from a July low at one point as retail traders piled in, pumping their bets on popular social media websites and trader chatrooms. They bought $58.2 million of the stock Wednesday, a day after snapping up a record $73.2 million, bringing their total net purchases in three weeks to $229.1 million, according to data compiled by Vanda Research.
While retail traders have been fueling the surge in Bed Bath & Beyond shares, the company’s fundamentals remain dismal. Analysts have sounded the alarm over liquidity concerns and the flailing retailer said in a filing it’s been working over the past several weeks with external financial advisers and lenders to strengthening its balance sheet with plans to provide an update at the end of the month.
