Shares of Bed Bath & Beyond plunged in early trading Thursday, as investors reacted to news that GameStop chairman Ryan Cohen plans to sell his holdings in the meme stock.
Shares tumbled 27% in early trading, falling to $16.90 per share as of 10:24 a.m. ET. They topped $23 at one point on Wednesday.
It was Ryan Cohen’s interest in the company that helped the stock shoot up 365% in the past month. Traders on Reddit’s r/WallStreetBets have flocked to it, much as they did with GameStop last year, another Cohen investment.
But yesterday after the market close, Cohen’s venture capital and activist firm RC Ventures, announced via a regulatory filing that it planned to sell its entire 11.8% stake in the company within the next 90 days. (Cohen first revealed his holding in the company in early March.)
That news came after a large investor in the home goods company sold 1 million shares. While Reddit initially accused Freeman Capital Management of the liquidation, a 20-year-old college student eventually emerged and said it was him dumping his holdings, netting $110 million in the process.
Because his holdings are in an investment firm, Cohen was required to give notice before his sale. The college student, Jake Freeman, was an individual investor, so was not required to give such notice. Prior to his sale, he was the second largest non-institutional investor in the company, buying shares at less than $5.50 each with $25 million raised from friends and family.
“I am truly going to miss being able to say ‘I am the second largest non-institutional shareholder of Bed Bath & Beyond,’ but I am certainly going to be shopping at [Bed Bath & Beyond] tomorrow,” Freeman wrote in a Reddit post.
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