Bed Bath & Beyond shares tank after billionaire Ryan Cohen sells stake

Bed Bath & Beyond’s share price has cratered this week, leaving many investors who have depleted shares of the struggling home goods retailer to stifling losses.

But at least two investors walked away with millions in gains after selling their stake in the company before the bottom fell. One is Ryan Cohen, the billionaire founder of online pet food company Chewy, while the other – and more surprisingly – is a student at the University of Southern California.

Cohen sold all of his 7.7 million shares on Tuesday, according to a Securities and Exchange Commission deposit. In doing so, he raked in a handsome $178 million profit, Barron’s reported. Cohen bought and sold his shares through his investment company RC Ventures.

Bed Bath & Beyond did not respond to a request for comment on Friday.

Bed Bath & Beyond was among a handful of so-called meme stocks, including video game retailer Gamestop, that retail investors embraced last year in defiance of Wall Street players who had largely written off the businesses. As a result, Bed Bath & Beyond’s share price fell from $3.70 per share at the start of the pandemic in March 2020 to approximately $30 per share in June 2021.

Shares of the company have seen a further rise this year, thanks in large part to Cohen himself and a new army of meme stock investors.

But on Friday, Bed Bath and Beyond’s share price fell nearly 41% to close at $11.03 on the day after hitting $28 earlier this week. Most of the drop came after investors noticed Cohen had sold his shares, said Ihor Dusaniwsky, managing director of predictive analytics at S3 Partners.

Bed Bath & Beyond’s share price held steady this year, then “suddenly the standard bearer of the rise and the left,” Dusaniwsky said. “He deflated the balloon.”

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Bed Bath & Beyond has become the center of conversation on WallStreetBets, a Reddit page where meme stock investors talk about strategy. In the posts, some users are reacting to Cohen’s sale while others are urging fellow investors to stay the course and hold onto their shares.

“It hasn’t returned to its pre-meme (price) lows,” Dusaniwsky said. “It’s the ones who hold him back until he’s back there who will be the ones who regret not selling him sooner.”

Before losing air, shares of Bed Bath & Beyond also generated a strong return for Jake Freeman, the Financial Times reported. A regulation deposit shows USC’s economics and math major bought about 5 million shares of the company in July, then sold on Wednesday, making a profit of $110 million.

Freeman told the Financial Times that he bought his shares at $5.50 each and the price began to rise soon after.

“I certainly didn’t expect such a vicious rally,” Freeman, 20, told the newspaper. “I thought it was going to be a play over six months old.”

Freeman did not respond to a request for comment on Friday. He told the Financial Times he got the money for his Bed Bath & Beyond investment from friends and family.

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