Bed Bath & Beyond shares are plummeting after meme-stock specialist Ryan Cohen cashed out his entire stake for $68 million.
Nam Y. Huh/AP Photo
Bed Bath & Beyond shares plummeted as much as 45% before Friday’s opening bell.
Meme-stock specialist Ryan Cohen dumped his whole stake in the retailer in two days this week.
Bed Bath & Beyond had soared earlier this month on renewed enthusiasm from retail investors.
Bed Bath & Beyond shares plummeted once more Friday as retail enthusiasm for the meme stock continues to fade.
RC Ventures boss Ryan Cohen confirmed the sale of his entire stake in the company, with the retailer’s second-largest shareholder cashing out 9.45 million shares and call options for a profit of $68 million.
Bed Bath & Beyond extended its losses from Thursday ahead of Friday’s opening bell, crashing 45% to trade at around $10 a share.
The stock had soared over 300% earlier this month thanks to renewed enthusiasm from the Wall Street Bets trading set, who have piled into meme stocks like Bed Bath and AMC Entertainment to bet against hedge funds, short sellers, and Wall Street more broadly.
But the stock has now seen most of those gains wiped out as major shareholders like Cohen fret over the retailer’s poor fundamentals. The company has struggled financially even as its stock price has surged, replacing its former chief executive Mark Tritton in June after it missed key earnings targets.
Wedbush said Thursday that investors should sell their Bed Bath & Beyond shares, with Cohen’s exit removing one of the company’s “key support legs.”
“BBBY finds itself in an unenviable position as it faces steep market share losses, an overabundance of inventory and dwindling cash reserves,” analyst Seth Basham said. “Quickly fixing these issues will be challenging, particularly given the soft demand environment, continued rapid sales declines and a weak balance sheet, adding significant risk to the company’s prospects.”
Wedbush maintained its price target of $5 a share, meaning it expects the stock to fall another 50% from its current level.
GameStop chairman Cohen isn’t the only investor to sell a stake in Bed Bath & Beyond for significant profit. 20-year-old college student Jake Freeman raked in an estimated $110 million profit by offloading his shares in the retailer this week.
Freeman, who heads up Freeman Capital Management, revealed he owned nearly 5 million Bed Bath & Beyond shares, or 6.2% of the company, in a Securities and Exchange Commission filing on July 21. He sold the entire position on Tuesday, he disclosed in another filing this week.
Read more: A college student cashed out a $110 million profit on Bed Bath & Beyond – after piling $25 million into the meme stock