Breaking News
Investing Pro 0
NEW! Get Actionable Insights with InvestingPro+ Try 7 Days Free

Meme stock Bed Bath & Beyond sinks after investor Cohen's exit

Stock Markets Aug 19, 2022 08:52
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. A shopping cart is seen at a Bed Bath & Beyond store in Manhattan, New York City, U.S., June 29, 2022. REUTERS/Andrew Kelly/File Photo
 
BBBY
-4.50%
Add to/Remove from a Portfolio
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 

(Reuters) -Bed Bath & Beyond Inc shares tumbled 35% after the bell on Thursday as billionaire investor Ryan Cohen exited the struggling home goods retailer by selling his stake following a stunning rally in the meme stock this month.

Cohen's RC Ventures was the second largest investor in the company. The venture capital firm said in a regulatory filing that it has no stake as of Aug. 16.

The billionaire declined to comment on further queries.

The company's shares were down at $12.27 in after-hours trading. After gaining nearly 360% this month, the share price had risen to $30 in the previous session when the rout began after RC Ventures said it aims to sell 9.45 million shares, worth $148.6 million.

It also included the sale of its January call options with strike prices between $60 and $80.

When Cohen's firm first disclosed the bullish bet on Tuesday, it boosted retail investor interest and resulted in record trading in the stock.

Brokerage Wedbush downgraded the stock to "underperform" and reaffirmed its price target of $5, saying the stock looks "disconnected from fundamentals" at the 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."

The retailer had in June ousted its chief executive and reported a slump in sales. It had in March added three directors in an agreement with Cohen, who is also the chairman of GameStop (NYSE:GME).

However, a stock market rebound has rekindled speculative options trading in single stocks among retail 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 (NASDAQ:BBBY) shares had burnt a more than $600-million hole in the pockets of those who had bet against the stock, S3 Partners said on Wednesday.

But 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. Its ticker was trending high on investor-focused social media platform, stocktwits.com.

Meme stock Bed Bath & Beyond sinks after investor Cohen's exit
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email