Bed Bath & Beyond shares plummet after Ryan Cohen confirms stake sale

Bed Bath & Beyond shares tumbled more than 45 per cent in after-hours trading on Thursday after Ryan Cohen, one of the company’s largest shareholders, sold his entire stake in the homeware retailer.

RC Ventures, Cohen’s investment vehicle, sold 9.45mn Bed Bath & Beyond shares — almost 12 per cent of the company — on Tuesday and Wednesday between a range of $18.68 and $29.21, according to securities filings. It also sold call options on the shares.

The sale resulted in a windfall for Cohen, who purchased his Bed Bath & Beyond shares at an average price of $15.34 roughly five months ago.

Cohen signalled he intended to exit his position after markets closed on Wednesday. That sent Bed Bath & Beyond shares down 19.6 per cent in normal trading hours. They fell a further 45.98 per cent after hours to $8.43.

The sharp decline in the company’s share price follows weeks of frenzied trading in the struggling homeware retailer, recalling the meme stock boom that gripped markets during the coronavirus pandemic.

Between late June and the end of regular trading on Wednesday, the company’s share price had increased more than 300 per cent — a staggering rise for a retailer that is running perilously low on cash.

An earlier disclosure on Monday from Cohen, who is also co-founder of pet food retailer Chewy, sent the stock sharply higher on Tuesday. He disclosed he had purchased a large number of call options in Bed Bath & Beyond — derivatives that can deliver a windfall if a stock rises in value.

Bed Bath & Beyond on Thursday said it was “working expeditiously” with external financial advisers to strengthen its balance sheet. The company’s most recent quarterly earnings showed the heavily indebted retailer had $108mn in cash, compared with $1.1bn in the same quarter a year earlier.

Cohen shook up Bed Bath & Beyond before exiting his position, adding three independent board directors and pushing for the sale of its baby brand, which did not take place.

Bed Bath & Beyond is the second meme stock that Cohen has targeted. He began investing in GameStop through RC in 2020, eventually accumulating a 12.9 per cent stake.

In January he was named to the video game retailer’s board, which was followed by a 1,500 per cent increase in its share price over two weeks. Cohen has overseen a C-suite and board makeover at GameStop, where he became the chair in June.

Cohen is not the only Bed Bath & Beyond investor to generate a large gain on trading the shares. On Wednesday, the Financial Times revealed that a 20-year-old shareholder who is still at university made a roughly $110mn gain by selling his stake.