Bed Bath & Beyond shares tank after billionaire Ryan Cohen dumps stake
Bed Bath & Beyond's stock price cratered this week, leaving many investors who lapped up shares of the struggling home goods retailer to choking losses.
But at least two investors have walked away with millions in gains after selling their stake in the company before the bottom fell out. One is Ryan Cohen, the billionaire founder of online pet food company Chewy, while the other — and more surprisingly — is a college student at the University of Southern California.
Cohen sold his entire 7.7 million shares Tuesday, according to a Securities and Exchange Commission filing. In doing so, he notched a tidy $178 million in profit, Barron's reported. Cohen bought and sold his shares through his investment firm RC Ventures.
Bed Bath & Beyond didn't respond to a request for comment Friday.
Bed Bath & Beyond was one of a handful of so-called meme stocks, including video game retailer Gamestop, that retail investors embraced last year in defiance of Wall Street players that had largely written off the companies. As a result, Bed Bath & Beyond's stock price grew from $3.70 a share at the start of the pandemic in March 2020 to about $30 each in June 2021.
The company's stocks saw another surge this year, thanks largely to Cohen himself and a fresh army of meme stock investors.
But Friday, Bed Bath and Beyond's stock price fell nearly 41% to close at $11.03 on the day after being as high as $28 earlier this week. Most of that decline came after investors noticed that Cohen sold his shares, said Ihor Dusaniwsky, managing director of predictive analytics at S3 Partners.
Bed Bath & Beyond's stock price had held its own this year, and then "all of a sudden the flag bearer for the rise up and kind of left," Dusaniwsky said. "He deflated the balloon."
A+ investment
Bed Bath & Beyond has become the center of conversation on WallStreetBets, a Reddit page where meme stock investors talk strategy. In the posts, some users are reacting to Cohen's sale while others are urging their 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 that hold it until it's back down there who will be the ones who are sorry they didn't sell earlier."
Before losing air, Bed Bath & Beyond shares also generated a hefty return for Jake Freeman, the Financial Times reported. A regulatory filing shows that the economics and math major at USC bought about 5 million shares of the company in July and then sold them on Wednesday, earning a $110 million profit.
Freeman told the Financial Times he bought his shares at $5.50 each and that the price started to rise soon thereafter.
"I certainly did not expect such a vicious rally upwards," Freeman, 20, told the newspaper. "I thought this was going to be a six-months-plus play."
Freeman didn't respond to a request for comment Friday. He told the Financial Times that he got the money for his Bed Bath & Beyond investment from friends and family.