A shopping cart is seen at a Bed Bath & Beyond store in Manhattan, New York City, the United States, 29 June 2022. Portal/Andrew Kelly/File Photo
Aug 18 (Portal) – Shares of Bed Bath & Beyond Inc (BBBY.O) fell 15% on Thursday after billionaire Ryan Cohen announced plans to sell his stock following a stunning rally in meme stock this month to sell its entire stake in the ailing retailer.
Cohen’s investment vehicle RC Ventures intends to sell 9.45 million shares worth $148.6 million, a filing late Wednesday showed. The second largest investor also proposed selling its January call options with strike prices between $60 and $80. Continue reading
Disclosure of those bullish bets had piqued interest from retail investors, leading to record trading in the stock on Tuesday.
Shares were at $19.4 in early trade after hitting $30 on Wednesday and up almost 360% this month.
Brokerage Wedbush downgraded the company to underperform and reiterated its $5 price target, saying the stock looks “disconnected from fundamentals” at the current valuation.
“The news that Ryan Cohen may be selling his stake in BBBY seems to have spooked meme stock believers,” said David Jones, strategist at Capital.com.
“Contrary to the frenzy of the past, (individual) traders seem more inclined to heed institutional wisdom than blindly fight for companies with bad fundamentals.”
A rebound in the broader stock market has revived speculative single-stock option trading among individual investors after volatile markets discouraged them from making risky bets earlier this year. Continue reading
So far in August, Bed Bath & Beyond’s sharp rise in shares had burned a more than $600 million hole in the pockets of those who had bet against the stock, S3 Partners said Wednesday.
However, short interest has risen to 55% of the company’s free float as bearish investors managed to find attractive entry points, the analytics firm said.
The company’s ticker was trending on investor-focused social media platform stocktwits.com.
The company added three new directors to its board after reaching an agreement in March with activist investor Cohen, who is also chairman of GameStop (GME.N).
The housewares retailer fired its CEO and reported a slump in sales in June. Continue reading
Reporting by Medha Singh and Anisha Sircar in Bengaluru; Edited by Vinay Dwivedi
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