Bed Bath & Beyond (NASDAQ:BBBY) stock is sinking lower today following notable sales by investors and a company executive. Last week, Ryan Cohen’s RC Ventures sold off its entire 9.45 million share position in the company, equivalent to an 11.8% stake. Cohen and RC Ventures had been classified as insiders because they owned a more than 10% stake in BBBY stock.
Of the 9.45 million shares, 1.67 million shares were attributed to out-of-the-money call options set to expire during January 2023. This sale came less than a week after the firm had disclosed the position, leaving retail investors holding the bag.
On top of that, Bed Bath and Beyond’s CFO also reported selling shares last week. Let’s get into the details
Insiders Are Selling Off BBBY Stock
On Aug. 16, CFO Gustavo Arnal sold 42,513 shares of BBBY stock at average prices ranging between $20 and $27.45. The next day, Arnal sold an additional 12,500 shares at an average price of $29.95. After the sales, Arnal still owns 255,396 shares. Furthermore, the transactions were enacted via a prearranged 10b5-1 plan arranged back in April.
It seems that the CFO’s sales proved to be beneficial for himself. Today, BBBY stock is trading in the $10 range, more than 50% lower than Arnal’s sales in the $20 range. In addition, his sales via the 10b5-1 plan may hint at further sales down the line.
On the other hand, Bed Bath & Beyond has taken a major hit, with shares down by more than 35% in the past week. While a stock’s performance does not always reflect a company’s wellbeing, Bed Bath isn’t in the best shape either. The home goods retailer says it has enough cash to sustain operations for the upcoming year, but that isn’t saying much. In late May, it had $108 million of cash reserves, “down from $440 million in February.”
Furthermore, the company is currently in the process of seeking a $375 million first-in-last-out loan. According to people familiar with the matter, the loan would increase liquidity and “help manage an existing asset-based debt facility.”
Earlier this year, Ryan Cohen proposed a series of strategic changes for Bed Bath & Beyond. These included an outright sale or the sale and/or spinoff of company assets, such as the Buy Buy Baby brand.
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.
