Meme stocks in reverse as Bed Bath & Beyond slump spooks investors

Aug 19 (Reuters) – Retail favorites GameStop and AMC Entertainment fell on Friday, reversing much of their recent gains after billionaire Ryan Cohen abruptly dumped his stake in struggling retailer Bed Bath & Beyond a few days after taking a bullish option position.

Bed Bath & Beyond Inc Shares (BBBY.O) extended their plunge, dropping 42% to $10.80, after Cohen said a day earlier that he had sold his 9.8% stake in the company, nearly five months after amassing it and pushed for changes. Read more

Selling the stake could result in a windfall of between $55 million and $60 million for Cohen, according to a Reuters review of regulatory filings. Read more

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Shares of Bed Bath & Beyond soared to $30 earlier this week after Cohen bought call options on Tuesday, rising from $4.38 in July in frantic trading that conjured up memories of the meme stock rally from the beginning of 2021.

If the losses continue, the title should swallow its weekly gains of 43%.

“Had it not sold, this title seemed to have real potential as a GME 2.0. Selling Ryan unfortunately killed all momentum,” said a trader who had invested in Bed Bath & Beyond when the title was $6.

Cohen owns around 12% of GameStop Corp. (GME.N)which, at the height of the retail frenzy in January 2020, had jumped 1,600%, 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 are up in the range of 3% to 55% this month.

“This latest roller coaster is not likely to extinguish the trend in stocks memes,” said Susannah Streeter, senior investment and market analyst, Hargreaves Lansdown, adding that the urge to ride the wave of speculation has gained momentum. ground as Wall Street rallied in recent weeks.

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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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