Retail stock hit by investor’s exit
Bed Bath & Beyond, the latest Wall Street meme, tumbles on news of a sell-off by a Chewy co-founder.
The newest meme stock on Wall Street, Bed Bath & Beyond, was tumbling even further in after-hours trading Thursday after a highprofile activist investor confirmed that he has bailed out of the stock.
Ryan Cohen, the cofounder of Chewy who helped ignite a couple of meme stocks to jaw-dropping heights, confirmed in a filing with U.S. regulators that he no longer owns any shares or options related to Bed Bath & Beyond’s stock. The move disappointed hordes of smaller-pocketed and novice investors, who had piled into the stock amid hopes that Cohen could turn around the company’s struggling finances, or at least send its stock on a moonshot like GameStop’s early last year.
Bed Bath & Beyond’s stock dropped nearly 35% in after-hours trading, after it had already sunk nearly 20% during the regular session to close at $18.55. The steep drop follows a monstrous run from $5.77 at the start of the month to $23.08 on Tuesday, which Wall Street analysts saw as irrational.
Cohen sold all of the nearly 7.8 million shares he held in Bed Bath & Beyond on Tuesday and Wednesday, at prices from $18.68 to $29.22. He also sold options tied to the stock. In March, he revealed that he had built a nearly 10% stake in Bed Bath & Beyond, with shares purchased at prices from $13.08 to $17.10.
Investors on Reddit’s WallStreetBets forum, a hub of discussion for the stock, were trying to gauge their next steps in what one commenter called “BLOOD BATH AND BEYOND.”
“How many times are ‘meme traders’ going to keep mindlessly gambling on false prophets instead of actually learning how to invest and trade?” one commenter wrote.
Cohen was a big reason many investors piled into Bed Bath & Beyond, particularly after his earlier investment in GameStop helped that stock soar to heights that stunned all of Wall Street. As Bed Bath & Beyond’s stock kept rising in recent days, many voices on Reddit and other social media sites urged other investors to keep buying.
Despite all the furor, Bed Bath & Beyond continues to lose money.
Bed Bath & Beyond fired Chief Executive Mark Tritton in June after the company based in Union, N.J., reported a 25% drop in sales in its most recent quarter, which followed a 22% sales decline the previous quarter. Tritton, who as CEO of Target revitalized that retailer by introducing a bevy of new brands, laid out a similar plan for Bed Bath & Beyond in 2021, but with less success.