Investor Ryan Cohen Completes Planned Sale of Bed Bath & Beyond Stake, Shares Fall 40%

Activist investor Ryan Cohen has exited his position in retailer Bed Bath & Beyond, according to a securities filing released late Thursday.

The filing shows that Cohen’s RC Ventures floated its stock on Tuesday and Wednesday in a price range between $18.68 per share and $29.22 per share. The company also sold its call options. Cohen said in a filing earlier this week that he intended to sell his holdings of the meme stock.

Shares of the stock fell 40.5% on Friday, adding to a loss of nearly 20% in the previous session. The stock closed at $11.03 per share.

Cohen, who co-founded Chewy and is the chairman of GameStop, bought more than 7 million shares and options in Bed Bath & Beyond earlier this year. The company added board members handpicked by Cohen and ousted its CEO after RC Ventures disclosed his involvement.

Cohen originally bought his shares of Bed Bath & Beyond at an average of about $15.34 per share. According to CNBC calculations, Cohen made about $59 million, before brokerage fees, from his transaction of Bed Bath & Beyond common stock. You may have made additional profits from the options.

In a statement Wednesday, Bed Bath & Beyond said it had reached a “constructive agreement” with RC Ventures in March and was exploring possible changes to its financial structure.

Shares of Bed Bath & Beyond have soared this month, driven in part by the retailer in an apparent resurgence of the meme-trading craze. The stock was up more than 200% in August at Thursday’s close.

Bed Bath & Beyond has seen abnormally high trading volume this month, and the stock has become the dominant topic of conversation on Reddit’s WallStreetBets page. Stocks have high short interest, or bets that they will fall made by hedge funds, which was one of the main qualities of the names that skyrocketed during the meme stock craze of 2021.

Interest from retail investors has come despite the company’s fundamental struggles. Bed Bath & Beyond in June reported that its first-quarter net sales fell 25% year over year, resulting in a net loss of $358 million. The company also reported negative operating cash flow of about $400 million.

The main concern is that its liquidity is drying up and the company needs to raise new capital to stay afloat.

Bed Bath & Beyond reported approximately $108 million in cash and cash equivalents in its fiscal first quarter, down from $1.1 billion a year earlier.

The company had been drawing on its existing $1 billion JPMorgan Chase asset-based revolving credit facility, according to its latest quarterly filing with the Securities and Exchange Commission.

But as the assets that were used as collateral for that ABL facility lose value, Bed Bath & Beyond will face increased pressure from its lenders to cut costs and find money elsewhere.

These issues come at a critical time for the retailer when they will want to have strong inventory in stock for the back-to-college and winter break seasons. But fears about their finances could prompt sellers to ask for more money up front, potentially exacerbating their financial woes.

— CNBC’s Lauren Thomas contributed to this report.


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About the Author: Chaz Cutler

My name is Chasity. I love to follow the stock market and financial news!