Investors should follow Ryan Cohen’s lead and leave Bed Bath & Beyond as the company faces an uncertain future, according to Wedbush. Analyst Seth Basham downgraded the struggling retailer to underperforming from neutral, saying in a note to clients that the investor’s decision to sell shares was active in Bed. Bath & Beyond removes a “critical support leg” for the company. “Cohen’s activist campaign succeeded in winning two permanent seats on the board, and the company sought to address a number of issues highlighted by RC, including a reassessment of its brand strategy. ownership, inventory mix, and management structure (including the departures of former CEO Mike Triton and CMO Joe Hartsig),” Basham writes. “What is more urgent, however, is getting the job done. BBBY burns through the cash and prospect of extra funding needed to strengthen balance sheets and rebuild supplier confidence.” Cohen said in a filing released Wednesday that he meant intends to sell his entire stake in Bed Bath & Beyond, totaling approximately 11.8% of the company’s shares when his options positions are included. Bed Bath & Beyond shares fell 10% in pre-market trading, reversing some of the big gains the stock saw in August during a resurgence in meme trading. o Reddit promoted. Basham says the company’s valuation on the stock market is “disconnected” from its fundamentals, creating downside risk for shareholders even if Bed Bath & Beyond is able to make a move. change. “BBBY is in an insurmountable position in the face of severe market share declines, excess inventory and dwindling cash reserves. A quick fix to these problems will be the a challenge, especially in light of an environment of weak demand, rapidly declining revenues and a weak balance sheet, adding significant risk to the company’s outlook,” Basham wrote. Wedbush maintains a $5/share price target for Bed Bath & Beyond, nearly 80% below Wednesday’s closing price.
