NEW YORK (AP) – The newest meme stock on Wall Street, Bed Bath & Beyond, tumbled even further in after-hours trading on Thursday after a high-profile activist investor confirmed that he’s bailed out of the stock.
Co-founder of Chewy Ryan Cohen, who helped ignite a couple of meme stocks to jaw-dropping heights, confirmed in a filing with United States (US) regulators that he no longer owns any shares or options related to Bed Bath & Beyond’s stock.
The move disappointed hordes of smaller-pocketed and novice investors, who had piled into the stock amid hopes Cohen could turn around the company’s struggling finances, or at least send its stock on a moonshot like GameStop’s early last year. Bed Bath & Beyond’s stock dropped 42 per cent in after-hours trading, after it had already sank nearly 20 per cent during the regular session to close at USD18.55. The steep drop follows a monstrous run from USD5.77 at the start of the month to USD23.08 on Tuesday, which Wall Street analysts saw as irrational.
Cohen sold all of the nearly 7.8 million shares he held in Bed Bath & Beyond on Tuesday and Wednesday, at prices between USD18.68 and USD29.22. He also sold options tied to the stock. In March, he first revealed that he had built a nearly 10 per cent stake in Bed Bath & Beyond, with shares purchased at prices between USD13.08 and USD17.10.
Investors on Reddit’s WallStreetBets forum, a hub of discussion for the stock, were trying to gauge their next steps in what one commenter called “BLOOD BATH AND BEYOND”.
“How many times are ‘meme traders’ going to keep mindlessly gambling on false prophets instead of actually learning how to invest and trade?” one commenter wrote.
Cohen was a big reason many investors piled into Bed Bath & Beyond, particularly after his earlier investment in GameStop helped that stock soar to heights that stunned all of Wall Street.
As Bed Bath & Beyond’s stock kept going higher in recent days, many voices on Reddit and other social media sites urged other investors to keep buying.
Along the way, some reveled in facing down the professional investors who had bet Bed Bath & Beyond’s stock would fall.
Despite all the furor, Bed Bath & Beyond continues to lose money as it struggles to navigate the post-pandemic retail landscape.