Bed Bath & Beyond’s stock price plunged into a crater this week, leaving many investors guzzling shares of the struggling household goods retailer to choke out losses.
But at least two investors have walked away with millions in profits after selling their stake in the company before bottoming out. One is Ryan Cohen, the billionaire founder of the online pet food company Chewy, while the other – and more surprisingly – is a student at the University of Southern California.
Cohen sold his entire 7.7 million shares on Tuesday, according to a filing from the Securities and Exchange Commission. In doing so, he made a nice profit of $178 million, Barron’s reported. Cohen bought and sold his shares through his investment company RC Ventures.
Bed Bath & Beyond did not respond to a request for comment Friday.
Bed Bath & Beyond was one of the few so-called meme stocks, including video game retailer Gamestop, which retail investors embraced last year in spite of Wall Street players who had largely written off the companies. As a result, Bed Bath & Beyond’s share price grew from $3.70 a share at the start of the pandemic in March 2020 to about $30 each in June 2021.
The company’s shares rose again this year,and a new army of meme stock investors.
But on Friday, Bed Bath and Beyond’s stock price fell nearly 41% to close at $11.03 the day after hitting as high as $28 earlier this week. Most of that drop came after investors noticed Cohen’s shares, said Ihor Dusaniwsky, director of predictive analytics at S3 Partners.
Bed Bath & Beyond’s share price had held up this year, and then “suddenly the standard-bearer for the rise and sort of left,” Dusaniwsky said. “He deflated the balloon.”
Bed Bath & Beyond has become the center of the conversation on WallStreetBets, a Reddit page where meme stock investors talk about strategy. In the posts, some users comment on the sale of Cohen, while others urge their co-investors to stay on track and hold onto their shares.
“It hasn’t gone back to its pre-meme (price) lows,” Dusaniwsky said. “It’s the ones who hold onto it until it’s down there again, the ones who regret not selling sooner.”
Before losing air, the shares of Bed Bath & Beyond also generated a hefty return for Jake Freeman, the Financial Times reported. A filing for filing shows that the economics and math major at USC purchased approximately 5 million shares of the company in July and sold it this Wednesday, making $110 million in profit.
Freeman told the Financial Times that he bought his shares for $5.50 each and the price began to rise shortly after.
“I certainly didn’t expect such a vicious rally to the top,” 20-year-old Freeman told the newspaper. “I thought this was going to be a six-month play.”
Freeman did not respond to a request for comment Friday. He told the Financial Times that he got the money for his Bed Bath & Beyond investment from friends and family.
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