Morgan Stanley Just Sold Bed Bath & Beyond (BBBY) Stock. Here’s Why.

Bed Bath & Beyond (NASDAQ:BBBY) reported fourth-quarter earnings yesterday, causing shares to change hands as much as 12% lower pre-market before recovering during regular market hours. For the period, the retailer reported revenue of $2.05 billion, missing analyst expectations of $2.07 billion. What’s more, earnings per share (EPS) tallied in at a loss of 92 cents, way below the expected figure of 3 cents. Finally, making matters worse, same-store sales were down 12% year-over-year (YOY).

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That’s not all the bad news for BBBY stock, however. Prior to the release, Morgan Stanley (NYSE:MS) reported selling 5.74 million shares of the company, or around 82% of its existing position.

Let’s jump into the details. Here’s what investors should know about Bed Bath & Beyond moving forward.

Morgan Stanley and BBBY Stock

Currently, Morgan Stanley owns 1.26 million shares of BBBY stock, according to a 13G filing received by the U.S. Securities and Exchange Commission on April 7. Back in February, the firm reported that it had acquired 7.01 million shares of the company, or 7.3% of all shares outstanding. After the sale, MS now owns only 1.3% of all shares outstanding. This is somewhat odd for the firm; it has an average holding period of 31.88 quarters for stocks in its portfolio.

So, why exactly did Morgan Stanley make this sale? While institutional investors are not required to disclose their reasons for sales, its apparent that Bed Bath & Beyond is going through a rough patch. This is evidenced by its recent earnings. Morgan Stanley also likely booked a gain. Right now, BBBY stock is trading higher than where it traded at the beginning of 2022. The firm may have decided to close out its position before BBBY reported earnings in fear of a bad report.

Who Is Betting Big on Bed Bath & Beyond?

Tracking institutional ownership is important, as large funds can often provide liquidity and price support for stocks. According to WhaleWisdom, which tracks all 13F filers, 267 funds currently own BBBY stock. That’s a decrease of 6 funds from Q3. Meanwhile, the number of shares held by 13F filers fell from 105.3 million to 96.4 million. On top of that, the institutional put/call ratio is 1.37, implying that funds in aggregate own more put options against BBBY than call options.

All things considered, it certainly doesn’t seem like BBBY is very popular among institutions. With that said, let’s take a look at its five largest shareholders:

  1. BlackRock (NYSE:BLK): 16.53 million shares or 17.15% ownership.
  2. FMR: 13.8 million shares or 14.32% ownership.
  3. Vanguard Group: 10.72 million shares or 11.13% ownership.
  4. RC Ventures: 9.45 million shares or 9.81% ownership.
  5. State Street (NYSE:STT): 3.72 million shares or 3.86% ownership.

On the date of publication, Eddie Pan did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.


Article printed from InvestorPlace Media, https://investorplace.com/2022/04/morgan-stanley-just-sold-bed-bath-beyond-bbby-stock-heres-why/.

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