Shares of Bed Bath & Beyond (NASDAQ:BBBY) stock are in full focus following a cryptic tweet from GameStop (NYSE:GME) Chairman Ryan Cohen.
I just got off the phone with what was once a great American brand. Lots of problems, no accountability for high paid execs and little interest in my help (at no cost). This could get interesting.
— Ryan Cohen (@ryancohen) April 12, 2023
Cohen has not yet disclosed the company in question. However, investors are in full speculation mode given his past relationship with Bed Bath & Beyond.
Last year, the activist investor purchased more than 7 million shares of BBBY at an average price of $15.34, plus call options. In August, Cohen then sold out of his entire stake at prices ranging between $18.68 and $29.22. Cohen also sold his call options.
In total, Cohen netted a profit of about $59 million before brokerage fees. The sale was highly controversial, as BBBY stock plunged afterwards, resulting in heavy losses for the remaining shareholders.
BBBY Stock: Is Ryan Cohen Getting Involved With Bed Bath & Beyond Again?
For now, Cohen’s involvement with Bed Bath & Beyond is still highly speculative and unconfirmed. Other investors have speculated that the company in question could be Anheuser-Busch InBev (NYSE:BUD). This follows Bud Light’s viral partnership with transgender influencer Dylan Mulvaney.
Meanwhile, the path ahead for Bed Bath & Beyond remains highly volatile. For starters, the retailer has proposed a reverse stock split in a ratio between 1-for-10 and 1-for-20 at its upcoming special meeting of stockholders on May 9. Bed Bath set the date of record to be eligible to cast votes to March 27. A reverse split would address two lingering issues currently facing the company.
First, BBBY stock hasn’t closed above $1 since March 17. Since the stock is listed on the Nasdaq, it must have a minimum share price of at least $1. Bed Bath will receive a deficiency notice from the exchange if shares trade under $1 for 30 consecutive days. Upon receipt of the notice, the company will have a 180-day grace period to achieve a minimum price of $1 for 10 consecutive business days. If it is unable to do so, the exchange may give Bed Bath another 180 days.
Second, Bed Bath & Beyond recently announced a $300 million common stock offering. However, the company does not have enough authorized shares to complete the offering in full. A reverse stock split would consolidate the number of shares and clear the road for additional share offerings.
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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.
