Retail favorites GameStop and AMC Entertainment fell on Friday, undoing much of their recent gains after billionaire Ryan Cohen abruptly dumped his stake in struggling retailer Bed Bath & Beyond days after he took a bullish options position in the stock.
Bed Bath & Beyond Inc's shares extended their plunge, falling 42% to $10.80, after Cohen said a day earlier he had sold his 9.8% stake in the company, almost five months after amassing it and pushing for changes.
The stake sale could result in a windfall between $55 million and $60 million for Cohen, according to a Reuters review of regulatory filings.
Bed Bath & Beyond's shares shot up to $30 earlier this week after Cohen bought some call options on Tuesday, vaulting from $4.38 in July in frenzied trading that evoked memories of the meme-stock rally of early 2021.
Should losses hold, the stock is set to swallow its weekly gains of 43%.
"If he hadn't sold, this stock seemed to have real potential as GME 2.0. Ryan selling killed any momentum unfortunately," said a retail trader, who had invested in Bed Bath & Beyond when the stock was at $6.
Cohen has about 12% stake in GameStop Corp, which at the height of the retail frenzy in January 2020 had shot up 1,600%, and is the largest shareholder.
GameStop and AMC Entertainment were down between 4% and 6%. E-commerce firm Vinco Ventures slumped 17%.
Despite Friday's losses, the stocks were up in the range of 3% to 55% this month.
"This latest rollercoaster isn't likely to extinguish the meme stock trend," said Susannah Streeter, senior investment and markets analyst, Hargreaves Lansdown, adding the urge to ride the wave of speculation has gained ground as Wall Street has rallied over recent weeks.
Bed Bath and Beyond https://fingfx.thomsonreuters.com/gfx/mkt/zdvxozwdrpx/Bed%20Bath%20Beyond.PNG
(Reporting by Anisha Sircar, Susan Mathew and Bansari Mayur Kamdar in Bengaluru; Editing by Shinjini Ganguli)
