Investor Ryan Cohen completes plan to sell Bed Bath & Beyond shares, shares fall 30%
Activist investor Ryan Cohen has left his position in the retailer Outdoor shower bedaccording to a securities filing released Thursday afternoon.
The submit shows Cohen’s RC Ventures dumped its shares on Tuesday and Wednesday at prices ranging from $18.68 per share to $29.22 per share. The company also sells call options. Cohen said in a filing earlier this week that he plans to sell his meme holdings.
The company’s shares fell 35% in extended trading, adding to a loss of nearly 20% in Thursday’s regular trading session.
Cohen, co-founder of Chewy and chairman of GameStop, bought more than 7 million shares and call options in Bed Bath & Beyond earlier this year. The company added the board members of Cohen’s choice and pushed out of its CEO after RC Ventures disclosed its stake.
Cohen initially bought his Bed Bath & Beyond stock at an average price of about $15.34 per share.
In a statement on Wednesday, Bed Bath & Beyond said it had reached a “constructive agreement” with RC Ventures. March and is exploring potential changes to its financial structure.
Bed Bath & Beyond shares have spike this monthpartly driven by retail merchants explicitly resurgence of meme trading craze. Shares were up more than 200% in August through the end of Thursday.
Bed Bath & Beyond has seen unusually high trading volume this month, and the stock has been the talk of the town on Reddit’s WallStreetBets page. Stocks with high short-term yields, or bets that it will fall by hedge funds, are one of the key qualities of the names that have skyrocketed during the 2021 stock meme craze.
Retail investors’ interest has come despite the company’s fundamental difficulties. 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 primary concern is that its liquidity could be depleted and the company must raise new capital to stay afloat.
Bed Bath & Beyond reported about $108 million in cash and equivalents in its fiscal first quarter, down from $1.1 billion a year earlier.
The company relied on its existing $1 billion asset-based revolving line of credit from JPMorgan Chase, according to its latest quarterly filing with the Securities and Exchange Commission.
But as properties used as collateral for that ABL facility depreciate, Bed Bath & Beyond will face greater pressure from lenders to cut costs and find money elsewhere .
These issues come at a critical time for retailers when they want to have ample inventory for back-to-school and winter breaks. But its financial concerns could cause supplier to ask for extra cashthis could exacerbate its financial troubles.
– by CNBC Lauren Thomas contributed to this report.
