Bed Bath and Beyond stock (BBBY) tanks on news of layoffs and stock dilution.

Ryan Cohen, Chairman of the Board of Gamestop, and large investor in BBBY, has sold his entire position of BBBY, having possibly previously made false statements about his intentions.

https://www.ft.com/content/891e8c35-6abf-400e-837b-3c0c6bfb6532?ftcamp=traffic/partner/feed_headline/us_yahoo/auddev

The astonishing rise and fall of Bed Bath & Beyond’s stock price this month has put a spotlight on the investor Ryan Cohen, who through his social media savvy and his portfolio has become a baron of the meme-stock realm.

Cohen is the chair of GameStop, the video game retailer that was among the first stocks to lift off in early 2021 after its embrace by retail traders congregating on online message boards.

Cohen’s tweets and investments are dissected, copied and amplified on social media sites such as Reddit.

Shares in the homewares company had already been surging when on Monday, August 15, Cohen filed documents with the US Securities and Exchange Commission detailing a previous purchase in February and March of a large number of call options on the stock.

The disclosure helped push Bed Bath & Beyond shares up 30 per cent the next day. On Reddit, a forum member posted a meme with a message written below Cohen’s visage. “Howdy folks,” it read. “This is Ryan from the cockpit we’re expecting some turbulence just remain in your seats.”

There was turbulence. On Wednesday, August 17, Cohen disclosed that he was selling his entire stake, and by Thursday he had fully closed his position with a gain of about $60mn. The sales sparked the worst one-day pullback in the history of Bed Bath & Beyond stock.

So ... on Monday, he publicly announces a huge buy in BBBY call options. On Tuesday, he posts on social media, advertising what he did. On Wednesday, he dumps his entire stock position.

Actions of a scumbag.

“A lot of the interest in Bed Bath as a meme stock had to do with Ryan Cohen’s involvement.”

When Cohen tweeted a frog emoji with a picture of an ice-cream cone in February 2021, Reddit posts launched into theories about what it meant for GameStop shares.

A week after disclosing his stake in Bed Bath & Beyond, Cohen tweeted: “Short sellers are the dumb stormtroopers of the investing galaxy.” The following week the company’s shares climbed to their highest level for the year.

As for Bed Bath & Beyond: “The fundamentals have deteriorated significantly since he took his stake,” said Justin Kleber, an analyst at Baird. The company provided a “strategic update” to investors on Wednesday in which it said it had secured more than $500mn in new financing and also planned to cut jobs and close stores. That sent shares tumbling about 25 per cent shortly after Wall Street’s opening bell.

“The obligation that he has, though, is to speak truthfully about his intentions,” said enforcement lawyer and former SEC assistant director, Gregory Bruch. “If his intentions were different than his actions that is [a] basis to conduct an investigation.”

In a letter to the board when he took his Bed Bath & Beyond stake, Cohen said his investment was “maniacally focused on the long-term”.

Yeah ... riiiiiiight.