Bed Bath & Beyond shares cratered more than 15% in after-market trading on Wednesday after GameStop chairman Ryan Cohen revealed plans to sell his holdings in the meme stock favorite.
In a regulatory filing on Tuesday, Cohen’s venture capital and activist firm, RC Ventures, said it planned to sell its entire 11.8% stake in Bed, Bath & Beyond within the next 90 days.
An investment firm must give notice about a planned sale when it or its affiliates plan to sell over 5,000 shares, or $50,000 worth of stock, that isn’t registered through other filings.
Cohen first revealed he held a sizable stake in Bed Bath & Beyond through RC Ventures in early March.
Around the time of the initial investment, the GameStop chairman, who is also a founder of online pet store Chewy, wrote a letter to Bed Bath & Beyond’s management urging changes at the company. The activist stance eventually led to three Cohen appointees joining the company’s board, and Bed Bath & Beyond shares soared as a result, eventually reaching a high of over $27 in late March.
The stock then fell as investors began to retreat from riskier assets. But with the stock market’s rally over the last month, Bed Bath & Beyond has rebounded.
The retailer’s shares have soared over 360% in the past month amid a revival in the meme stock movement. Bed Bath & Beyond stock has consistently topped the list of the most talked about names on Reddit’s Wall Street Bets forum over the past few weeks, according to data from Ape Wisdom.
Bed Bath & Beyond also got a boost from regulatory filings on Monday that showed Cohen had bought over 9.4 million shares of the company through RC Ventures, including more than 1.6 million in distant out-of-the-money call options with strike prices between $60 and $80.
Investors profit from call options when the underlying asset’s price rises, and with a strike price—the price where traders can exercise their option—as high as $80, investors got the impression that Cohen was betting the stock could soar from its Monday closing price of just $16 per share.
Those hopes were dashed on Wednesday with the new regulatory filing.