Bed Bath & Beyond shares fall after investor Ryan Cohen reveals intention to sell shares

Outdoor shower bed Shares tumbled in extended trading Wednesday after activist investor Ryan Cohen said in a filing that he plans to sell his entire stake in the retailer through his firm RC Ventures. me.

Based on a Form 144 was filed with the Securities and Exchange CommissionRC Ventures proposes to sell 9.45 million shares of the company, the total amount it contains in the Bed Bath. Form 144 serves as the official notice of the proposed sale of securities.

The aggregate purchase price of 7.78 million shares directly owned by RC Ventures is about $119.4 million, excluding brokerage commissions, according to previous SEC filings. And the total purchase price of corporate calls exercised on 1.67 million shares directly owned by RC Ventures is about $1.8 million, also excluding those commissions.

A call option gives the buyer the right, but not the obligation, to buy the stock at a set actual price. Cohen’s options are the actual prices of $60, $75, and $80.

Hypothetically, if Cohen managed to sell all of his Bed Bath common stock at Wednesday’s closing price of $23.08, he would have collected about $60 million, according to our calculations. CNBC. Cohen’s hypothetical profit could be greater if he also sold options.

First Cohen disclosure he held nearly 10% of Bed Bath through his operating company in early March. FactSet said his holdings had grown to 11.82% at the end of March.

At that time, Cohen, GameStop Chewy’s chairman and founder wrote a letter to Bed Bath’s then-CEO Mark Tritton, saying he believes the home-store chain is struggling to reverse the decline in market share and navigate supply chain constraints. He also urged the retailer to consider selling its Buybuy Baby chain.

At the end of March, Bed Bath said reach an agreement with the activist company to add three people selected by Cohen to its board of directors, effective immediately.

Just three months later, Bed Bath Sudden replacement of Tritton as CEO in June, appointing restructuring specialist and independent director Sue Gove as interim successor. This comes after the company suffered another quarter of sluggish sales and heavy losses.

A Bed Bath spokeswoman said the retailer was “delighted to have reached a constructive agreement with RC Ventures in March and is committed to maximizing value for all shareholders.”

“Specifically, we have been working urgently over the past few weeks with financial advisors and outside lenders to strengthen our balance sheet,” she said in an emailed statement. , and added that the retailer will provide more information in an update at the end of the month. .

A representative for RC Ventures did not immediately respond to CNBC’s request for comment.

More recently, Bed Bath has been facing liquidity problems, with its treasury depleted before the holiday season and during back-to-school and college sales.

Bed Bath reported about $108 million in cash and equivalents in its fiscal first quarter, down from $1.1 billion a year earlier. Its net loss grew to $358 million from a $51 million loss in the same period in 2021.

However, the meme warehouse craze has found new life in recent weeks and Bed Bath already the main beneficiary. As of late Wednesday, the stock is up 58% so far this year, easily outperforming the broader market.

Shares of the home appliance retailer have surged more than 300% in August alone, on heavy trading volume. According to FactSet, the stock traded for nearly 400 million shares on Tuesday and another 249 million on Wednesday.

Bed Bath was also the most talked about stock on Reddit’s Wall Street Bets over the past week, according to third-party data provider Quiver Quantitative.

On Wednesday, after news of Cohen’s filing began to surface, users took to the Wall Street Bets page to emphasize that Form 144 was intended solely to provide notice of a proposed sale.

User “foyerhead” said: “Ryan Cohen didn’t sell. FORM 144 is ‘right’ to sell. It doesn’t mean you’re selling or sold. If you own 10% or more of a company, you must apply to you for the right to sell within the next 90 days.”

“DeadSol” user wrote: “Of course he doesn’t sell. He’s an ape like us.”

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