This summer is all about sequels. We've had Top Gun, Jurassic World, Thor... and now we're all buying tickets for GameStop Part 2: Bed Bath & Beyond.
Here's the deal: Bed Bath & Beyond's business has been circling the drain for a while, but the stock got a boost this spring when a prominent young investor took at 10% stake, aiming to push for changes that would modernize the company.
That investor was Ryan Cohen, the co-founder of Chewy.com. If the name rings a bell it's probably because Cohen's appointment in January 2021 to the board of GameStop helped spark a 1,600% rally in GME, turning the screws on short sellers and ushering in a new era for internet-based retail investors. Cohen is now the chairman of GameStop, and something of a Millennial Warren Buffett for non-professional traders on Reddit and other social media.
In early March, when Cohen announced his stake in Bed Bath & Beyond, the Reddit crowd was fired up.
Fast forward to this week...
Bed Bath & Beyond shares were soaring. Then came the twist no one saw coming.
On Wednesday, Cohen filed paperwork with the SEC saying he intends to sell the vast majority of his Bed Bath & Beyond stake, just five months after acquiring it.
The news sent Bed Bath & Beyond shares tumbling about 20%. Even more perplexing than the filing itself was Cohen's silence on the matter.
To his loyal followers online, many who claim to have poured their savings into Bed Bath & Beyond stock, Cohen's silence was a sign that he was up to something, that he didn't actually plan to sell. They bought the dip, expecting another GameStop-like rally.
But Cohen didn't come to the rescue. On Thursday evening, the billionaire confirmed he had exited his position, sending the stock down more than 36% in after-hours trading.
"The exact reasons for Cohen ditching his stake are not yet known," Neil Saunders, managing director of GlobalData, said in a report. "However, the extent of the problems at Bed Bath & Beyond are likely to have played a part in his reasoning ... Almost every metric at Bed Bath & Beyond is negative."
Meanwhile, the mood on WallStreetBets, the popular investing subreddit that played a key role in the birth of "meme stocks," was a bit like soldiers returning to a battlefield — a little lost, but still trying to rekindle the fervor of the GameStop craze. Rally cries to hold the stock filled the forum, along with familiar sermons about getting rich by squeezing the short sellers (aka hedge funds and other investors who have wagered that the stock will go down).
"LETS GO APES! BUY THE DIP AND HOLD!"
"I wanted to get work done today but the hedgies and bears have declared war. Well, war is what they're getting."
"HODL you primates, beat thy chest with diamond hands and buckle your seatbelts."
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