Meme stocks reverse as Bed Bath & Beyond slump scares investors

Aug 19 (Reuters) – Retail favorites GameStop and AMC Entertainment fell on Friday, reversing many of their recent gains after billionaire Ryan Cohen abruptly dumped his stake in struggling retailer Bed Bath & Beyond just days after he left a bullish options position in took the share.

Shares of Bed Bath & Beyond Inc (BBBY.O) extended their plunge, falling 42% to $10.80 after Cohen said the day before that he sold his 9.8% stake in the company, nearly five months after he had amassed it and insisted on changes. read more

The sale of the stock could result in a $55 million to $60 million windfall for Cohen, according to a Reuters assessment of regulatory filings. read more

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Shares of Bed Bath & Beyond rocketed to $30 earlier this week after Cohen bought a number of call options on Tuesday and rose from $4.38 in July in a frenzied trade that recalled the meme stock rally of early 2021.

If the losses continue, the stock will swallow its 43% weekly gain.

“Had he not sold, this stock seemed to have real potential as GME 2.0. Ryan’s sale unfortunately killed any momentum,” said a retailer, who had invested in Bed Bath & Beyond when the stock hit $6.

Cohen has an approximately 12% stake in GameStop Corp (GME.N), which was up 1,600% at the height of the shopping frenzy in January 2020, and is the largest shareholder.

GameStop and AMC Entertainment (AMC.N) fell between 4% and 6%. E-commerce company Vinco Ventures (BBIG.O) fell 17%.

Despite Friday’s losses, stocks were up between 3% and 55% this month.

“This latest rollercoaster isn’t likely to quench the meme stock trend,” said Susannah Streeter, senior investment and market analyst at Hargreaves Lansdown.

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Reporting by Anisha Sircar, Susan Mathew and Bansari Mayur Kamdar in Bengaluru; Editing by Shinjini Ganguli

Our Standards: The Thomson Reuters Trust Principles.

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