Activist investor Ryan Cohen took a stake in Bed Bath & Beyond (NASDAQ:BBBY) in March and sought changes for the company. Here’s a look at how investors who followed him into an investment in the retailer did.
What Happened: Cohen disclosed a 9.8% stake in Bed Bath & Beyond via his RC Ventures in March 2022.
“We believe Bed Bath needs to narrow its focus to fortify operations and maintain the right inventory mix to meet demand, while simultaneously exploring strategic alternatives that include separating buybuyBaby Inc and a full sale of the company,” Cohen said in a letter to the company.
The letter was revealed on Sunday, March 6, 2022. The company issued a response saying it was working on a turnaround plan.
It was revealed later that Cohen’s stake had been boosted to 11.8% of the company based on holdings of stock and options.
Cohen’s stake offered optimism to investors who saw the company being the next GameStop Corp (NYSE:GME). Cohen took a sizable stake in the struggling video game retailer and pushed for changes and eventually became the chairman of the company.
Cohen was seen as a leading figurehead of the “meme stocks” movement that boosted the share prices of several retail favorite, high short-interest stocks.
A recent filing revealed that Cohen still held his sizable stake in Bed Bath & Beyond and that it included call options with strike prices up to $80, sparking optimism in the long-term outlook in the company.
Shares of Bed Bath & Beyond rallied over the last week before an announcement that Cohen could sell a portion of or his entire stake in the company. On Thursday, a filing revealed Cohen sold his entire stake in the retailer, netting a profit of $68.1 million.
Here’s a look at how investors in Bed Bath & Beyond are faring after Cohen’s sale.
Related Link: Former Hedge Fund Manager Calls Out Ryan Cohen's Bed Bath & Beyond Trade, Complains To SEC: 'What A Total Disgrace'
Investing $1,000 In BBBY: Shares of Bed Bath & Beyond closed at $16.18 on Friday, March 4, 2022. Over that weekend, Cohen sent a letter to the company’s board stating his 9.8% stake in the company and a push for changes as a top five shareholder.
Shares of Bed Bath & Beyond opened for trading at $30 on Monday, March 7, 2022.
A $1,000 investment could have purchased 33.33 shares at the time.
That $1,000 investment would be worth $374.63 today based on a price of $11.24 for BBBY shares at the time of writing.
Investors would be down 62.5% from the opening price of Bed Bath & Beyond shares after Cohen’s stake and letter were announced.
Bed Bath & Beyond shares hit a high of $30.06 on March 7, which would turn out to be the highest level since Cohen’s stake was revealed.
This means if an investor timed their sale perfectly after buying in at the opening price after the letter, the best they could have done was a profit of 6 cents per share, or $2.
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