There is a version of the Bed Bath and Beyond story that gets told as a meme stock tale — retail investors, Reddit, a short squeeze. That version is real. But it is not the whole story. The whole story includes a man who knew exactly what he was doing. Who took a large position, made public statements that moved the stock, filed the paperwork to sell before most investors knew he was leaving, and walked away with the money while the retail investors held the bag. His name was Ryan Cohen. And this is the autopsy.
— The Vulture
THIS WEEK'S AUTOPSY
Bed Bath and Beyond was not a surprise collapse. The warning signs were visible for years. Same-store sales had been declining since 2019. The company was spending more on stock buybacks than on store upgrades. Between 2004 and 2021 it bought back nearly $12 billion of its own stock — twelve billion dollars — while the stores deteriorated, while e-commerce ate the category, and while competitors upgraded and Bed Bath stood still. By 2022 the balance sheet was broken. Debt was rising. Revenue was falling. The company needed a turnaround it did not have the capital to execute.
Then Ryan Cohen showed up. Cohen was the founder of Chewy, the online pet retailer he had built and sold to PetSmart for $3.35 billion. He had recently taken a large position in GameStop and become a symbol of the retail investor movement. In January 2022 he disclosed a roughly 10% stake in Bed Bath and Beyond. The stock moved immediately. Cohen published a letter pushing for change — asset sales, cost cuts, a strategic pivot. The meme stock crowd piled in. The stock ran. At its peak in August 2022, Bed Bath and Beyond was trading at levels that made no sense given the state of the business.
Then on August 16 and 17, 2022, Cohen sold everything. All of it. In two days. He had filed the paperwork — a 13D/A — that signalled he was exiting. But most retail investors did not see it coming. The stock collapsed. The investors who had followed Cohen in, many of them first-time traders, were left holding a position in a company that was now in freefall.
By April 2023, Bed Bath and Beyond filed for Chapter 11 with $5.2 billion in liabilities. The stock went to zero. The company liquidated. Every store closed. Ryan Cohen made approximately $60 million on the position. The SEC investigated. No charges were filed.
That is the Bed Bath and Beyond autopsy. A structurally broken business, a meme stock moment, and a very well-timed exit.
Full episode is on YouTube now. Link below.
THE WATCHLIST
Three companies showing distress signals right now. Not financial advice. Do your own research.
Conn's HomePlus. Consumer electronics and furniture retailer that filed Chapter 11 in July 2024. Watching whether the restructuring buyer can stabilize the credit-dependent customer base that drove most of its revenue.
Express Inc. Fashion retailer that filed Chapter 11 in April 2024 and emerged under new ownership. Watching whether the brand has enough relevance left to drive traffic without the promotional pricing that was propping up the old model.
Instant Brands. Parent of Instant Pot and Pyrex, filed Chapter 11 in 2023. Watching whether the IP assets hold value as standalone brands after the operational business is stripped away.
THE VULTURE'S PICK
Every issue I share one tool or resource I actually use in my research. Coming in the next issue. — The Vulture
NEW ON YOUTUBE
This week's episode is live now. Bed Bath & Beyond Was a Meme Stock. Then It Went to Zero. How $12 billion in buybacks hollowed out the business, how Ryan Cohen moved the stock and then exited, and how $11.8 billion in value disappeared in eighteen months. Watch it here: https://www.youtube.com/@thewallstreetvulture
BEFORE YOU GO
On Friday I am releasing the next autopsy. This one is about a company that laughed at the future — literally. A competitor walked into their offices and offered to sell them the technology that would eventually destroy them, for fifty million dollars. They said no. That company is now worth nothing. The one they turned down is worth over two hundred billion dollars. That is the Blockbuster autopsy. Friday, July 10 at 7:00am Eastern.
— The Vulture