September 28, 2022

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Bed, Bath & Beyond shares plunge after investor Ryan Cohen reveals his intention to sell his stake

Bed, Bath & Beyond shares plunge after investor Ryan Cohen reveals his intention to sell his stake

Signs pointing to the Bed Bath & Beyond store in Somerville, Massachusetts.

Brian Snyder | Reuters

bed bath behind Shares tumbled in extended trading on Wednesday after activist investor Ryan Cohen said in a filing that he plans to sell his entire stake in the retailer through his company, RC Ventures.

according to Form 144 filed with the Securities and Exchange CommissionRC Ventures has proposed selling 9.45 million shares of the company, which is The total amount he carries in the Bed Bath. Form 144 is a formal notice of a proposed sale of securities.

Representatives for RC Ventures and Bed Bath did not immediately respond to CNBC’s request for comment.

The total purchase price of 7.78 million shares owned directly by RC Ventures is approximately $119.4 million, excluding brokerage commissions, according to previous SEC filings. And the total purchase price of the company’s call options that are exercisable in 1.67 million shares owned directly by RC Ventures is approximately $1.8 million, also excluding those commissions.

Call options give the buyer the right, but not the obligation, to buy stock at a specified strike price. Cohen’s options were the strike prices of $60, $75 and $80.

If Cohen could hypothetically sell all of Bed Bath’s common stock at Wednesday’s closing price of $23.08, he would get about $60 million, according to a CNBC calculation.

Cohen first open He owned approximately 10% of the shares in Bed Bath through his active company in early March. FactSet says its holdings were 11.82% in late March.

At that time, Cohen GameStop Chewy’s chairman and founder wrote a letter to Mark Tritton, CEO of Bed Bath, saying he believed the household goods chain was struggling to reverse its declining market share and bypass supply chain problems. He also urged the retailer to consider selling the Buybuy Baby chain.

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Later in March, Bed Bath said that make a deal With the activist company to add three people selected by Cohen to its board of directors, effective immediately.

Only three months later, however, Bath Triton suddenly replaced As CEO in June, he appointed restructuring expert and independent director Sue Goff as his interim successor. This came after the company suffered another quarter of slowing sales and heavy losses.

Lately, Bed Bath has had liquidity issues, with its coffers drying up before the holiday season and during back-to-school and back-to-college sell-offs.

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

However, the meme-stock craze has found new life in recent weeks, and the Bed Bath was the main beneficiary. As of Wednesday’s close, the stock is up 58% so far this year, easily outpacing the broader market.

Shares of the home goods retailer are up more than 300% in August alone, with heavy trading volume. The stock saw nearly 400 million shares traded on Tuesday and another 249 million shares on Wednesday, according to FactSet.

Bed Bath has also been the most cited stock on Reddit’s Wall Street Bets page 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 Beats page to confirm that Form 144 is only intended to provide notice of an offer to sell.

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User “foyerhead” said: “Ryan Cohen did not sell. FORM 144 is the ‘right’ to sell. It does not mean that you are selling or selling. If you own 10% or more of a company, you must submit a submission that grants you the right to sell within 90 days coming.”

DeadSol user wrote: “Of course he didn’t sell. He’s a monkey like us.”