Home NewsStock Market News bed bath & beyond share price: Meme stock Bed Bath & Beyond tumbles as billionaire Cohen to dump stake

bed bath & beyond share price: Meme stock Bed Bath & Beyond tumbles as billionaire Cohen to dump stake

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bed bath & beyond share price: Meme stock Bed Bath & Beyond tumbles as billionaire Cohen to dump stake

Bed Bath & Beyond Inc shares dropped 15% on Thursday after billionaire investor Ryan Cohen disclosed plans to sell his entire stake in the struggling retailer, following a stunning rally in the meme stock this month.

Cohen’s investment vehicle RC Ventures intends to sell 9.45 million shares, worth $148.6 million, a filing late on Wednesday showed. The second largest investor also proposed a sale of its January call options with strike prices between $60 and $80.

The disclosure of those bullish bets had piqued the interest of retail investors, driving record trading in the stock on Tuesday.

Shares were at $19.4 in early trading, having hit $30 on Wednesday and rising nearly 360% this month.

Brokerage Wedbush downgraded the company to “underperform” and reaffirmed its price target of $5, saying the stock looks “disconnected from fundamentals” at current valuation.

“News that Ryan Cohen may be selling his stake in BBBY appears to have spooked the meme stock faithful,” said David Jones, strategist at Capital.com.

“Unlike the frenzy of the past, (retail) traders seem more inclined to follow institutional wisdom than to blindly battle for companies with poor fundamentals.”

A rebound in the broader stock market has revived speculative options trading in single stocks among individual investors after volatile markets turned them away from risky bets earlier this year.

So far in August, the sharp run-up in Bed Bath & Beyond shares had burnt a larger than $600-million hole in the pockets of those who had bet against the stock, S3 Partners said on Wednesday.

However, short interest has increased to 55% of the company’s free float as bearish investors managed to find attractive entry points, the analytics firm said.

The company’s ticker was trending high on investor-focused social media platform, stocktwits.com.

The firm added three new directors to its board after reaching an agreement in March with activist investor Cohen, who is also the chairman of GameStop.

The home goods retailer ousted its CEO and reported a slump in sales in June. (Reporting by Medha Singh and Anisha Sircar in Bengaluru; Editing by Vinay Dwivedi)

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