![]() During that quarter its free cash flow was negative $488 million. At the end of May 2022, its balance sheet sported a mere $108 million in cash - down 75% from the previous quarter. Its adjusted net loss was $2.83 per share more than twice as bad as the estimated loss of $1.39, according to TipRanks.īBBY’s cash position was very weak in May and it did not take much imagination to see it running out. In the May-ending quarter, revenues of $1.46 billion fell 25% from the year before - $50 million short of the consensus estimate. Sadly the restructuring plan it shared last month did not inspire investors. ![]() ![]() When BBBY last reported results in June, its sales were dropping and its cash position was weak. BBBY’s Poor Performance And Restructuring Plan As of September 5, its shares had fallen another 22% to $8.59, according to CNBC. That day BBBY stock fell 40.5% - dropping about 20% more on the 19th - to $11.03. On August 18, RC Holdings revealed in an SEC filing that it had sold all its common shares. That’s because on August 16 and 17, he dumped BBBY’s common shares at “a range of prices between $18.68 per share and $29.22” which RC Ventures had purchased at an average price of $15.34 a share, according to CNBC. This news sent the stock up 29% on August 16 “on extremely heavy trading volume.” On August 15, 2022, RC Ventures “announced in an SEC filing purchases of over one million January 2023 call options with exercise prices at $60, $75, and $80-significantly higher than Bed Bath & Beyond shares were trading,” according to a BusinessWire press release of a lawsuit filed by Bragar Eagel & Squire. Last month, Cohen dumped his BBBY common share holdings at what looks like an impressive profit which CNBC estimated at $59 million - abetted by a big bet on call options - which give the owner the right, but not the obligation, to acquire shares at a specified price in the future.įirst came Cohen’s big purchase of such call options with an exercise price way above the stock’s then-current market value - signaling that he expected BBBY stock to go way up. Specifically, in March his RC Ventures reported that it held 9.8% of BBBY common shares at which time Cohen wrote a letter to its board in which he “ several necessary and significant operational changes - including a potential full sale of the company,” according to GoBankingRates. In March, Cohen - an activist investor who is chair of GameStop and co-founder of Chewy - announced a big stake in BBBY which he suddenly dumped in August. What a short, strange trip it’s been for Cohen and BBBY! Cohen’s completion of his stock sale.” Last week, BBBY said that “it believed the suit is without merit,” noted the Journal. On August 23, Arnal and Cohen were named as plaintiffs in a shareholder lawsuit alleging that “the pair sought to inflate the company’s share price before Mr. Shareholder lawsuit alleging a ‘pump and dump’ scheme.On August 31, BBBY announced a restructuring plan that sent its stock plunging, and On August 18, Ryan Cohen, an activist investor popular with the meme-stock crowd, dumped his shares in the retailer days after announcing ownership of out of the money call options, Since then, new reasons have emerged for questioning the future of BBBY - in which short interest has risen from 32.4% to 40.4%. On July 22, I saw four reasons its stock could drop more - most notably plunging sales, dwindling cash reserves, and the termination of its CEO, Mark Tritton - who had presided over a disastrous private-label product strategy.
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