With the sale of his stock in Bed Bath & Beyond Inc. (NASDAQ:BBBY), billionaire Ryan Cohen made $68.1 million in profit, representing a 56% return on an investment he owned for around seven months.
On the other hand, the retail traders who invested millions of dollars in the stock of the faltering store may just now be beginning to feel the pain, particularly if they were tardy in the trade.
Ryan Cohen’s Retirement
Following the disclosure of Cohen’s retirement in a regulatory filing, Bed Bath & Beyond shares, which had already fallen over 20% on Thursday, plummeted as much as 44% further in premarket trading on Friday. It’s shaping up to be another instance of meme-stock stock, with the price decline being equally dramatic as the price rise.
The worst thing for the Reddit crowd was that their enthusiasm was stoked by Cohen’s direct engagement in the stock. At least some pointed to a disclosure that revealed the GameStop Corp. chairman was still hanging onto his interest, which at that point topped 10% of the company, as the price at one point this week more than quadrupled from a previous low in July. It contained call options that would only be profitable if the stock price kept rising.
However, Cohen had already started selling at that moment. Cohen made his early wealth as the co-founder of the pet supply company Chewy Inc.
According to a regulatory filing, His RC Ventures spent $121.2 million between mid-January and early March to purchase 7.78 million shares and the option to purchase an additional 1.67 million shares. He sold every one of them this week for a total of $189.3 million, according to a document filed on Thursday following the end of the US stock market.
Even as Bed Bath & Beyond’s financial predicament was getting worse, a flood of capital from retail traders drove up the stock in recent weeks. The day after purchasing a record $73.2 million worth of the shares, they purchased $58.2 million worth on Wednesday. According to information gathered by Vanda Research, net purchases over the course of three weeks came to $229.1 million.
The company, which specializes in bankruptcy and restructuring, will counsel the retailer on options for acquiring new capital, renegotiating current debt, or doing both.
Bonds and loans issued by Bed Bath & Beyond are now trading at distressed levels. The debt fell again after Cohen’s filing, but the biggest reduction occurred after the company’s disappointing earnings announcement on June 29.
The retailer had a market value of around $1.5 billion as of Thursday’s closure.
The business stated in a statement on Thursday that it had been “working swiftly over the past few weeks with external financial advisers and lenders on improving our balance sheet” and would offer more details at the end of the month.
Featured Image: Megapixl @Jetcityimage
Author Jowi Kwasu 
