Bed, Bath & Beyond (BBBY) shares fell sharply Thursday after key investor Ryan Cohen filed forms with the Securities and Exchange Commission to sell his entire stake in the struggling home goods retailer.
Cohen's RC Ventures, which purchased call options on Bed, Bath & Beyond stock earlier this year and holds an 11.8% stake in the group, is looking to sell around 9.45 million shares, according to the form 144 filing published late Wednesday, worth around $148.5 million. If fully-executed, Cohen would net around $60 million from the sale.
Bed, Bath & Beyond, which said it suffered "an acute shift in customer sentiment" over its fiscal first quarter that has "materially escalated" into the summer months, reached an agreement with Cohen in March to look at several strategic alternatives, including sale of its lucrative buybuy Baby division, to support is deteriorating balance sheet. As part of that push, CEO Mark Tritton was pushed out in the spring.
"We were pleased to have reached a constructive agreement with RC Ventures in March and are committed to maximizing value for all shareholders," Bed, Bath & Beyond said in a Reg-FD filed with the Securities and Exchange Commission that was made public Thursday. "We are continuing to execute on our priorities to enhance liquidity, make strategic changes and improve operations to win back customers, and drive cost efficiencies; all to restore our company to its heritage as the best destination for the home, for all stakeholders."
"Specifically, we have been working expeditiously over the past several weeks with external financial advisors and lenders on strengthening our balance sheet, and the Company will provide more information in an update at the end of this month."
Bed, Bath & Beyond shares were marked 15.3% lower in early Thursday trading to change hands at $19.60 each.
Bed, Bath & Beyond shares have risen more than 350% over the past three weeks, on notably heavy trading volume, amid a surge in interest in the stock that could also be linked to a so-called 'short squeeze' that seeks to punish investors betting against a particular stock.
Recent data from S3 Partners suggests short interest comprises around 55% of the outstanding shares of Bed, Bath & Beyond, with bet against the retailer totaling more than $400 million.
Bed Bath & Beyond posted an adjusted loss for the three months ending on May 28, the group's fiscal first quarter, of $4.49 per share on revenues of just $1.46 billion and a 27% slump in comparable sales.
The retailer said it would accelerate markdowns of its existing inventories "in order to right-size inventory levels commensurate with the declining sales trends."
Tritton had called the division an "important cornerstone" of the group's turnaround plans, and said he had hoped to increase BABY sales to more than $1.5 billion over the next three years.
