Insider Selling

BBBY declines by 40% in one day after Ryan Cohen sells stock

Shopping carts in lanes are shown with pink shade in the background of image with blog detail of Bed Bath & Beyond

Ryan Cohen is currently the Chairman of GameStop Corp. (GME: US), the company which is wildly believed to have kickstarted the ‘Meme Stock’ sensation on Jan’21. Prior to this, Cohen co-founded and served as CEO of Chewy Inc (CHWY: US) before stepping down in March 2018. 

Currently, Cohen possesses a net worth of almost $2.5 billion but in 2022, he gained attention when he announced his stake in Bed Bath & Beyond (BBBY: US), and even more so later when he sold the shares. 

The BBBY bubble

For BBBY stock, the entire month of August, so far, has been a rollercoaster ride. At the beginning of 2022, the stock closed at a price of $15.16, and the price later rose to $27.23 on March 29, only to decline later in the year. On August 8, the stock closed at $11.41. By August 17, the stock reached its highest value of $30.00 before closing at $23.08 the same day. In a single month ending on August 17, BBBY’s stock price went up by nearly 365.32%.

The stock has been on short sellers’ radar for quite some time now. Since July 17 this year, the stock’s utilization rate is a full 100%. As of August 19, BBBY has 62,693,452 shares on loan, giving 78.41%  as the current short interest rate. 

On August 16, Ryan Cohen filed a Form 144 via the broker JP Morgan Securities to sell 7,780,000 shares of BBBY common stock that he owned, worth almost $160.66 million. He later sold his entire shareholding in various transactions on the 16th and 17th, causing the stock price to plummet from its price hike in August. Since his sale, the stock has declined by 55.25% to its current value of $9.24. 

Cohen’s sale was, interestingly followed by Bed, Bath and Beyond’s CFO - Arnal Gustavo - filing his own Form 144 on August 17. Through the broker, UBS Financial Services Inc, this form was for 12,500 shares at a price of $23.08. In total, the value of the shares he plans to sell amounted to $288,500. Prior to this, Gustavo also sold stock on August 16 and 17, prior to filing the form. 

In contrast, Reddit users have flocked together to buy and hold BBBY stock and possibly, send it heading for another short squeeze. No doubt, these retail investors are not happy that Cohen sold the stock. 

Cohen & the Meme Stock frenzy

Ryan Cohen bought shares of Bed Bath & Beyond via his investment company, RC Ventures, back on March 7. These purchases made him a 10% stakeholder in the company, and the same day, BBBY opened at $30.00; a price hike of 85.41% compared to its value of $16.18 before the weekend. 

Cohen previously purchased shares in GameStop, propelling the stock price up. Even now, the stock is up by 12.05% comparing GME’s stock price from Cohen’s trade date to the present date. 

Since early-2021, the meme stock frenzy has only risen thanks to the power of retail investors and hypes on social media. In the meme stock universe, GameStop is a classic example. While the company itself has little to nothing in offerings, it was still revealed to be in a better position than Bed Bath & Beyond. According to a source, GameStop has $617 million in debt, whereas Bed Bath & Beyond has almost $3.3 billion. Regardless, the horizon for both companies is blurred, as is the case with most meme stocks. 

Recent Articles