Bed Bath and Beyond's
On Friday, Bed Bath & Beyond fell by more than 40% in premarket trading and fell another 20% during regular trading.
Just days earlier, Cohen triggered a 70% jump in the share price when a different SEC form revealed that his investment firm, RC Ventures, had purchased 1.6 million shares of the company. However, it's unclear why those forms were only filed this week.
RC Ventures first revealed that Cohen owned a 9.8% stake in Bed Bath & Beyond in March, but he had to file updated forms because the company bought back some of its shares, making Cohen a major shareholder. While Cohen's filed this update on August 15, the buyback that triggered it was carried out in April.
"Good for him," professor of forensic accounting at the University of Pennsylvania's Wharton School, Daniel Taylor, told The New York Times. "That's prudent risk management."
Taylor added that Cohen could be in trouble if he intentionally filed when he did in order to drive up the share price and land a profit, but said that finding enough roof of intent isn't likely.
Cohen may not be in legal trouble, but he's certainly landed himself in hot water online. Cohen, who also founded the online pet retailer Chewy
Those investors are now taking to the same platforms that helped fuel the meme stock craze to complain about the apparent betrayal by Cohen.
"After reading what Ryan Cohen just did, I hope you all understand that he is not one of us," one Reddit user wrote.
Users are accusing the corporate executive of triggering the rise in Bed Bath & Beyond's on Tuesday, just to dump his entire stake a few days later for $178 million. Cohen spent $121 million acquiring the stock. He has declined to comment on his sudden reversal.
"I feel I took my hard-earned money out of my pocket and put it right into Cohen's," said one user who reported losing $40,000 by purchasing Bed Bath & Beyond after Cohen did.
With small investors losing trust in Cohen, GameStop shares are also down, seeing a 20% drop since the Bed Bath & Beyond stock dump was reported.
Following his initial investment in Bed Bath & Beyond, Cohen negotiated with the company to make significant adjustments, including selling its Buy Buy Baby brand. Bed Bath & Beyond settled with Cohen soon after, and three of the investor's board nominees were selected.
However, those adjustments haven't been enough to save the retailer. Before this week's revelations, the stock had fallen 40% compared to its price when the agreement was made. Its second-quarter reports showed a net loss of $358 million, with cash-on-hand down to $140 million compared to last year's $1.1 billion.
