For the three weeks since it put out a truly ghastly set of quarterlies, Bed Bath & Beyond shares have been steadily rising. A lot. From about $5 to as high as $28, much to the benefit of one college student and his family. Why? Why not! What does a question like “why” even mean when you’re dealing with a meme stock? What are you, one of those old-fashioned losers who still believe in “fundamentals” and “results” and “making money”? Pshaw. Encrust your hands in diamonds and enjoy the rocket ride moon-bound.
Anyway, that fairly steady rise became a good deal sharper and bumpier on Tuesday and Wednesday, when the thing was up some 80% at points and eventually closed up by nearly half. Why? Well, that’s a question we can answer: It’s because GameStop chairman and meme-stock hero Ryan Cohen, who’d already gotten involved in BBB back in March, disclosed Monday that he’d bought up a bunch of call options, which the Reddit crowd took as a sign he wasn’t selling no matter how dismal things looked for Bed Bath—and as a sign to begin buying, creating a short squeeze leading to more buying, etc.
Well, it seems that one key assumption of the above was wrong.
Billionaire investor Ryan Cohen has filed to sell his entire stake in Bed Bath & Beyond Inc., sending shares of the meme-stock retailer plummeting after-hours Wednesday…. In the filing released Wednesday, Mr. Cohen through his firm, RC Ventures, proposed to sell up to 7.78 million shares and all of the options….
Shares… fell over 10% in late trading Wednesday before the filing was released, and was down another 18% in after hours trading.
And another handful of points since. Good thing that college kid got out before Cohen announced his plans to do likewise.
Jake Freeman and his family bought almost 5m shares in the struggling US homeware retailer at less than $5.50 a share in July for a total outlay of about $25m.
After an almost 500% increase in the shares, sparked by intense chatter about the stock on Reddit message boards, including several posts by Freeman, he sold them for more than $130m – crystallising the vast profit.
They rose as high as $28 on Tuesday, when Freeman is understood to have sold most of his stake.