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Activist investor Ryan Cohen completes planned sale of Bed Bath & Beyond stake, stock falls 44%

Activist investor Ryan Cohen has exited his position in retailer Bed Bath & Beyond, in accordance with a securities filing released Thursday afternoon.

The filing implies that Cohen’s RC Ventures dumped its stock on Tuesday and Wednesday at a variety of prices between $18.68 per share and $29.22 per share. The firm also sold its call options. Cohen said in a filing earlier this week he designed to sell his holdings of the meme stock.

Shares of the stock fell 44.6% in extended trading, increasing a lack of nearly 20% during Thursday’s regular trading session.

Cohen, who co-founded Chewy and may be the chairman of GameStop, purchased a lot more than 7 million shares and call options of Bed Bath & Beyond earlier this season. The business added board members of Cohen’s choosing and pushed out its CEO after RC Ventures revealed its stake.

Cohen originally purchased his shares of Bed Bath & Beyond at typically roughly $15.34 per share. In accordance with CNBC calculations, Cohen made about $59 million, before brokerage fees, on his trade of Bed Bath & Beyond common stock. He might have made additional profits on your options.

In a statement Wednesday, Bed Bath & Beyond said it had reached a “constructive agreement” with RC Ventures in March and was exploring potential changes to its financial structure.

Shares of Bed Bath & Beyond have rocketed higher this month, fueled partly by retail traders within an apparent revival of the meme trading craze. Shares were up a lot more than 200% in August by Thursday’s close.

Bed Bath & Beyond has seen abnormally high trading volume this month, and the stock is among the most dominant topic of conversation on Reddit’s WallStreetBets page. The stock has high short interest, or bets that it’ll decline created by hedge funds, that was one of many qualities of names that soared through the meme stock craze of 2021.

The retail investor interest has come regardless of the company’s fundamental struggles. Bed Bath & Beyond in June reported that its first-quarter net sales were down 25% year over year, producing a net lack of $358 million. The business also reported negative operating cashflow around $400 million.

Of top concern is that its liquidity could possibly be drying up, and the business must raise new capital to be able to stay afloat.

Bed Bath & Beyond reported roughly $108 million in cash and equivalents in its fiscal first quarter, down from $1.1 billion per year prior.

The business have been drawing on its existing $1 billion asset-based revolving credit facility from JPMorgan Chase, in accordance with its latest quarterly filing with the Securities and Exchange Commission.

But because the assets which were used as collateral for that ABL facility lose value, Bed Bath & Beyond will face greater pressure from its lenders to spend less and discover money elsewhere.

These issues come at a crucial time for the retailer when it’ll want strong inventory in stock for the back-to-college and winter holiday seasons. But fears about its finances might lead to vendors to require more cash in advance, that could exacerbate its financial troubles.

CNBC’s Lauren Thomas contributed to the report.

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