Bed Bath & Beyond shares tumble after Ryan Cohen's departure

Stock meme influencer Ryan Cohen plummets on Bed Bath & Beyond stock.

Shares in the beleaguered retailer fell 45% in premarket trading on Friday as was revealed late Thursday. Cohen’s RC Ventures has sold its entire position in Bed Bath & Beyond. Cohen, who is also chairman of GameStop, had about an 11.8% stake in the company.

Cohen’s exit caps an otherwise wild week of trading for the retailer, which is not far from entering the grave alongside Sears, Kmart, Borders and Circuit City.

Shares of Bed Bath & Beyond soared nearly 70% in intraday trading Tuesday on the back of a massive short. BBBY stock ended the session up 29% on a volatile day. From Tuesday’s close until before Cohen’s post-session disclosure on Thursday, the stock had gained another 17%.

Originally Cohen revealed a 9.8% stake in the company in March and recent resurgence in BBBY stock involved the meme community coming together again to oppose institutional forces that have opposing views on stocks and core businesses.

On Monday, Yahoo Finance reported on signs of financial stress at Bed Bath & Beyond locations in New York — and received glowing reviews from BBBY fans. On Tuesday, B Riley cut its rating to Sell on Bed Bath & Beyond. Analysts at UBS and Wedbush also reaffirmed their sell ratings on the stock this week.

But with Cohen now out of the picture, the market may return to focusing on Bed Bath & Beyond’s bleak near-term outlook.

And, as we have already reportedit’s brutal.

After a failed push in 2021 and most of 2022 to stock stores with private label merchandise no one had heard of while closing stores and laying off workers, Bed Bath & Beyond ended its most recent quarter with just over $100 million in cash, declining sales, poor store traffic and a badly damaged brand.

There is currently an Interim Executive Director running the business, which was obtained after loading of former Target CEO Mark Tritton, and some observers are wondering whether suppliers will continue to deliver all the merchandise Bed Bath & Beyond needs for the holiday season amid the retailer’s severely weakened financial condition.

A man takes a closer look at coffee makers while shopping inside the Bed Bath & Beyond store in New York April 13, 2011. REUTERS/Lucas Jackson

A man takes a closer look at coffee makers while shopping at a Bed Bath & Beyond store in New York April 13, 2011. REUTERS/Lucas Jackson

In a filing Wednesday, Bed Bath & Beyond said it could have an announcement about a capital increase by the end of August.

“We think the fact that RC Ventures plans to liquidate its entire stake in the stock is a telling sign that there is less and less support from key fundamental-oriented names in this given,” Wedbush analyst Seth Basham, who also has a rating of selling Bed Bath & Beyond stock, said on Yahoo Finance Live. “With this catalyst, we think the stock could reverse course and start trading lower.”

Other top Wall Street analysts also reiterated that investors should be wary of BBBY.

“The road ahead will be long and filled with many challenges,” UBS analyst Michael Lasser said on Yahoo Finance Live. “If they come out of this challenging situation, the business could look a lot different – probably look smaller.”

On Thursday, Lasser restated a sell rating on shares of Bed Bath & Beyond and hit a $3.50 target price on the stock, suggesting about 80% downside risk of BBBY stock price at this time.

Brian Sozzi is editor-in-chief and anchor at Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn.

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