Signs the Bed Bath & Beyond store in Somerville, Massachusetts.
Brian Snyder | Reuters
Bed Bath & Beyond Shares fell in extended trading on Tuesday after activist investor Ryan Cohen said he intends to sell his entire stake in the retailer through his company RC Ventures.
according to Form 144 filed with the Securities and Exchange CommissionRC Ventures has offered to sell 9.45 million shares of the company The total amount he kept in the Bed Bath. Form 144 serves as the official notice of the proposed sale of securities.
Representatives for RC Ventures and Bed Bath did not immediately respond to CNBC’s request for comment.
The total purchase price for the 7.78 million shares directly owned by RC Ventures is about $119.4 million, excluding brokerage commissions, according to previous SEC filings. And the total purchase price of the firm’s exercisable call options on 1.67 million shares directly owned by RC Ventures is about $1.8 million, excluding those commissions.
Call options give the buyer the right, but not the obligation, to buy the stock at a specified strike price. Cohen’s options were holiday prices of $60, $75 and $80.
If Cohen could hypothetically sell all of his Bed Bath common stock at Wednesday’s closing price of $23.08, CNBC estimates he would have made about $60 million.
Cohen first revealed he owned about 10% of Bed Bath through his activist firm in early March. FactSet says its shares were up 11.82% at the end of March.
Then Cohen, the GameStop Chewy’s chairman and founder wrote a letter to then-Bed Bath CEO Mark Tritton, saying he believed the home goods chain was battling declining market share and trying to address supply chain challenges. He also urged the retailer to consider selling the Buybuy Baby chain.
Later in March, Bed Bath said concluded a contract adding the three people selected by Cohen to the board effective immediately with the activist firm.
Just three months later, the Bed Bath suddenly replaced Tritto as CEO in June, naming restructuring expert and independent director Sue Gove as his interim successor. This followed sluggish sales and heavy losses in another quarter of the company.
Recently, Bed Bath has been experiencing liquidity problems, with coffers drying up in the run-up to the holiday season and back-to-school and college sales periods.
Bed Bath reported cash and cash equivalents of $108 million in the fiscal first quarter, down $1.1 billion from a year earlier. Its net loss rose to $358 million from a $51 million loss in the same period in 2021.
Yet the meme stock luxury has found new life and Bed Bath in recent weeks has been the main beneficiary. As of Wednesday’s close, the stock had gained 58% this year, handily outperforming the broader market.
Shares of the home goods retailer rose more than 300% on heavy trading volume in August alone. The stock saw about 400 million shares trade on Tuesday and another 249 million on Wednesday, according to FactSet.
Bed Bath has also been far from the most mentioned stock on Reddit’s Wall Street Bets page over the past week, according to third-party data provider Quiver Quantitative.
On Wednesday, after news of Cohen’s filing broke, users took to the Wall Street Bets page to emphasize that the Form 14 is only intended to provide notice of the offer to sell.
User “foyerhead” said: “Ryan Cohen didn’t sell. FORM 144 is a ‘fee’ to sell. It doesn’t mean you’ve sold or sold. If you own 10% or more of a company, you must file. The right to sell within the next 90 days giving form.”
“Of course he didn’t sell it. He’s a monkey like us,” wrote user “DeadSol”.