Billionaire investor Ryan Cohen sold his entire Bed Bath & Beyond (BBBY) stake on August 16 and 17. This surprise sale was just a few months after he first bought the shares of the home-goods retailer in March 2022. As per a WSJ report, there is speculation that Cohen may have failed to comply with a regulatory disclosure before selling his BBBY stake. The Securities and Exchange Commission (SEC) requires an activist investor to disclose his intent to sell the shares while filing form 13D of share ownership.
On August 16, Cohen filed the 13D disclosing his 11.8% stake in BBBY comprising 9.45 million shares. However, he did not mention his intent to sell the shares in this filing. The news sent the shares soaring as several investors followed Cohen’s conviction.
Soon after, the investor filed a form 4 with the SEC dated August 16, in which Cohen’s firm RC Ventures had undertaken a series of sales of BBBY stock. This form became public only on August 17 in the afternoon, leading to a massive slump in the stock’s price. RC Ventures completed the entire sale of BBBY stock on August 17.
While Cohen missed revealing his intent to sell in form 13D, it is difficult to ascertain whether he had plans of selling the shares before filing the form. Meanwhile, Cohen reaped huge profits from his share sale during the two days.
BBBY stock has lost nearly 60% since the date of Cohen’s share sale. Securities experts and law professors are mulling whether there has been a breach and whether the SEC will investigate Cohen in the matter. However, most of them argue that there may be no proof of intent to sell, and hence any investigation is not possible. Also, the SEC has not approached Cohen on the subject to date.
Is BBBY Stock a Buy?
On TipRanks, BBBY stock has a Strong Sell rating. This is based on one Hold versus 12 Sells assigned in the past three months. The average BBBY stock price forecast of $3.54 implies a whopping 66.9% downside potential from current levels.
Takeaway – No Clarity on Cohen’s Intent to Sell BBBY Stock
Ryan Cohen’s share purchase and sale have disrupted BBBY stock as the retailer struggles to improve its performance. Nonetheless, there is no clarity on his intent to sell the shares. Thus, it may not be questioned by the regulatory authorities.
On the other hand, the meme stock frenzy keeps the BBBY stock wildly volatile. As per TipRanks’ Stock Investors tool, investor sentiment is currently Very Positive on Bed Bath & Beyond, with an impressive 34.1% of portfolios tracked by TipRanks increasing their exposure to BBBY stock over the past 30 days.
