Meme-stock champion Ryan Cohen sold his entire Bed Bath & Beyond stake in 2 days - and bagged a $68 million profit
- Ryan Cohen sold his entire Bed Bath & Beyond stake for $189 million, netting a $68 million profit.
- The activist investor spent $121 million on the stock and bullish call options earlier this year.
Ryan Cohen sold his entire Bed Bath & Beyond stake in two days this week, bagging a cool $68 million profit from his seven-month wager on the ailing homewares retailer. The news slashed the company's stock price by as much as 43% on Friday.
The GameStop chairman and meme-stock champion spent $121 million to buy 7.8 million Bed Bath & Beyond shares, and call options on a further 1.7 million shares, in the first quarter of this year. He also penned a letter to the retailer's directors, calling out numerous problems and urging them to refocus, modernize, and explore a partial or full sale of the business.
The Chewy cofounder and activist investor appeared to be emulating his approach to GameStop, where he built a stake in the video-game retailer, pressed its bosses to make changes, secured several seats on its board, and set about revitalizing the company. His vote of confidence spurred retail investors to snap up Bed Bath & Beyond shares too, in the hope they would skyrocket in value as GameStop's shares did in early 2021.
The meme-stock crowd helped propel the shares up as much as 30% on Wednesday, after Cohen's RC Ventures investment vehicle disclosed on Tuesday that its position was intact, and its ownership had grown from 9.8% to 11.8% due to Bed Bath & Beyond's shrinking share count.
However, Cohen revealed in a Thursday filing that he intended to sell his entire position, and confirmed in a later filing that on Tuesday and Wednesday, he had cashed out all of his stock and options for a total of $189 million. Bed Bath & Beyond's stock price promptly tanked, as retail investors realized Cohen wasn't sticking around to save the company.
The billionaire investor and his team may have determined Bed Bath & Beyond was a lost cause, and decided to capitalize on the meme stock's breathless rally this month. After all, the company's latest earnings showed its net sales plunged 25% year-on-year, its net loss grew by seven-fold, and its cash pile shrunk by 75% in three months.
Cohen didn't immediately respond to a request for comment from Insider.
The GameStop chairman wasn't the only investor to cash out this week. Jake Freeman, a college student who runs Freeman Capital Management, disclosed a 6.2% stake in Bed Bath & Beyond in July, and revealed this week that he disposed of the entire position on Tuesday. He spent about $25 million on the shares, and sold them for north of $130 million, he told the Financial Times.