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Shares of Bed Bath & Beyond, a favorite with the meme stock crowd, plunged after analysts warned that the retailer is losing a “key support leg” in the form of activist investor Ryan Cohen, who completed a sale of his more than 10% stake in the retailer late on Thursday.


Bed Bath & Beyond’s stock fell over 40% in after hours trading on Thursday, reversing course after rallying roughly 300% so far this month thanks to an army of retail investors on forums like Reddit’s WallStreetBets who have been buying up shares.

Investors dumped shares—following a 20% decline during the day—after news that GameStop chairman and activist investor Ryan Cohen completed a sale of his nearly 10 million shares and options in Bed Bath & Beyond, worth roughly $150 million, according to regulatory filings.

That news of a looming sale prompted Wedbush analyst Seth Basham earlier in the day to downgrade Bed Bath & Beyond shares to a “sell” rating on Thursday, echoing other recent analyst warnings about the stock as he pointed out that the retailer’s market valuation is “ disconnected” from fundamentals.

After disclosing a nearly 10% stake in the company back in March, Cohen pushed for the company to turn around its struggling business and sell its Buy Buy Baby chain, eventually reaching a deal to add several board members.

His exit removes a “key support leg” for Bed Bath & Beyond, which faces “pressing” issues like high cash burn and the need for further financing, according to Basham, who warns that the stock’s elevated valuation only creates more downside risk for shareholders .

The analyst maintained a $5 per share price target for the stock, implying over 70% downside from current price levels of around $17 per share.