The A Bed Bath & Beyond store is seen on June 29, 2022 in Miami, Florida.
Joe Raedle | Getty Images News | beautiful pictures
Outdoor shower bed Stocks spiked Tuesday as active retail traders on social media flocked to the stock, encouraged by news that GameStop President Ryan Cohen has bet again on sellers. Retail is in trouble.
Shares of Bed Bath & Beyond spiked more than 70% to an intraday high of $28.04 in midday trading Tuesday amid multiple pauses due to volatility. The stock last traded 35% higher.
A regulatory filing Monday night showed Cohen’s venture capital firm RC Ventures purchased outbound call options on more than 1.6 million shares of Bed Bath & Beyond at actual prices between 60 and 80 dollars.
Investors profit from calls when the underlying security rises in price. The strike price is where the option holder can buy the security, which means Cohen is betting that Bed Bath & Beyond can go as high as $80 a share. Shares closed Monday at $16.
The call options Cohen purchased will expire in January 2023.
The new purchase caught the attention of retail traders on Reddit’s WallStreetBets forum. The stock ticker BBBY became the most popular mention in chat rooms on Tuesday, according to alternative data provider Quiver Quantitative.
Trading volume on Bed Bath & Beyond exploded on Tuesday with more than 160 million shares changing hands as of noon ET. The company has only about 80 million shares outstanding, according to a regulatory filing.
Cohen first revealed that he holds nearly 10% of Bed Bath & Beyond through RC Ventures in early March. FactSet says his holdings amounted to 11.82% at the end of March.
At that time, GameStop The chairman wrote a letter to Bed Bath’s then-CEO Mark Tritton, saying he believes the home chain chain is struggling to reverse its decline in market share and navigate its difficulties. supply chain. He also urged the retailer to consider selling its Buybuy Baby chain.
In late March, Bed Bath said it had signed an agreement with the activist’s company to add three people selected by Cohen to its board of directors, effective immediately.
Just three months later, Bed Bath abruptly replaced Tritton as CEO in June, appointing restructuring specialist and independent director Sue Gove as interim successor. This comes after the company suffered another sluggish quarter and heavy losses.
Now under Gove, Bed Bath is trying to turn around the ailing business, but analysts are still not sure it will succeed. The company will discontinue one of the in-house brands created under Tritton, CNBC reported earlier this monthand there may be more.
Creating in-house brands for kitchen bedding and accessories is at the core of Tritton’s plan for change, which he drew on from his experience at Target. But in the end, he stripped away the items customers were looking for and invested heavily in things that weren’t selling well.
