BBBY Stock: Does Ryan Cohen Have Big Plans for Buy Buy Baby?

  • Bed Bath & Beyond (BBBY) stock is plunging 40% today following a hefty decline yesterday.
  • Filings show that Ryan Cohen’s RC Ventures dissolved its stake in the meme stock, leading to the drop.
  • Some believe Cohen’s next move could be a spinoff, leading to more speculative interest.
Bed, Bath & Beyond (BBBY) storefront with trees in front
Source: Shutterstock

Investors in Bed Bath & Beyond (NASDAQ:BBBY) stock have seen a wild past few days. After running more than 70% higher in an apparent short squeeze a few days following the release of a 13-F filing from Ryan Cohen’s RC Ventures, BBBY stock has since given up all its gains and then some.

Today, BBBY is dipping 40%, following yesterday’s 20% decline. These moves come after filings released on Thursday indicated that Cohen had liquidated his position in Bed Bath & Beyond. For retail investors bullish on the short squeeze potential of shares, that was a big hit for sure.

Ryan Cohen happens to have a cult following in circles like the r/WallStreetBets crowd, given his position as Chairman of GameStop (NYSE:GME). His work to revitalize struggling businesses has been met with praise from meme stock traders. Accordingly, Cohen’s moves are closely followed by the “ape” community.

One interesting angle that speculators are taking with BBBY stock today, however, is the idea that Cohen’s next move may be a deal to spin off Buy Buy Baby, a BBBY brand. Does the recent social media chatter hold any weight?

Can BBBY Stock Go on Another Run?

One of the somewhat intriguing theses floating around right now is that Ryan Cohen may still be looking to find value within Bed Bath & Beyond. A letter dated from March 6 from RC Ventures to Bed Bath & Beyond outlines proposed actions, including spinning off the company’s Buy Buy Baby brand or pursuing an outright sale. Individuals on social media appear to think Cohen could still help create value for BBBY stock despite having divested his share.

Now, any sort of activist push is going to be difficult at this point, considering Cohen is out. The sale of his large stake doesn’t bode well for the thesis that he’ll be able to accomplish anything with the board. Accordingly, I personally think the theory is outlandish.

However, there are many speculative investors out there who still believe in the parabolic potential of this short squeeze opportunity. Indeed, short interest remains high for BBBY stock. And despite its recent plunge, options have gotten cheaper for speculators to nab.

I expect more volatility on the horizon for Bed, Bath & Beyond. Sure, we may see some interesting potential moves in the coming days. But investors would probably do best to watch this name from the sidelines.

On the date of publication, Chris MacDonald 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 Publishing Guidelines.

Chris MacDonald’s love for investing led him to pursue an MBA in Finance and take on a number of management roles in corporate finance and venture capital over the past 15 years. His experience as a financial analyst in the past, coupled with his fervor for finding undervalued growth opportunities, contribute to his conservative, long-term investing perspective.

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