Bed, Bath & Beyond (BBBY) shares extended declines Monday, pulling the meme-stock favorite to the lowest levels in three weeks, as investors continue to exit the troubled home goods retailer on the back of last week's $60 million sale by activist investor Ryan Cohen.
Cohen's RC Ventures sold all of hits 9.45 million shares in Bed, Bath & Beyond last week, only months after putting three of this allies on the company board, netting around $60 million in the process.
The timing of the sale, however, has raised questions among some investors, and could draw interest from the Securities and Exchange Commission, given Cohen's proximity to management talks with "external financial advisors and lenders on strengthening our balance sheet".
Just five months ago, Cohen pressed the retailer to look at several strategic alternatives, including sale of its lucrative buybuy Baby division, and pushed or the ouster of CEO Mark Tritton, who left the group in June.
Bloomberg News reported over the weekend, in fact, that some Bed, Bath & Beyond supplies are either restricting or halting shipments to the retailer after it fell behind on payments amid a broader cash-flow squeeze. Bed, Bath & Beyond said in June that comparable sales over its May quarter fell 27% from last year, pulling overall revenues to just under $1.46 billion.
"From a fundamental standpoint, we believe trends at Bed, Bath & Beyond remain challenged as seen in our field work as well as our proprietary KFL Data and Geolocation data," said KeyBanc Capital Markets analyst Bradley Thomas, who carries an 'underweight' trading with a $2 price target on the stock. "We continue to forecast significantly negative EBITDA, EPS, and FCF for Bed, Bath & Beyond in 2022."
Bed, Bath & Beyond shares were marked 7.75% lower in early trading to change hands at $10.16 each.
Recent data from S3 Partners suggests short interest comprises around 52.5% of the outstanding shares of Bed, Bath & Beyond, with bet against the retailer totaling more than $317 million.
Data from the Yolosocks.live website, which tracks real-time mentions on stocks within Reddit's r/wallstreetbets chatroom, indicated that Bed, Bath & Beyond is now the most-discussed stock among users, with activity up 55% from yesterday to around 5,053 individual posts. GameStop ranks second with 1,175 posts.
