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Shares of Bed Bath & Beyond (NASDAQ:BBBY) are down over 40% in premarket trading Friday on several news and disclosures.
In a move that will raise eyebrows, investor Ryan Cohen’s RC Ventures’ filing showed that it had sold its entire 11.8% ownership stake. Moreover, the company’s CFO Gustavo Arnal sold 55,013 shares of BBBY this week at prices ranging from $20 to $29.95.
Adding to an already negative news flow, BBBY said it hired the law firm Kirkland & Ellis for debt help. This law firm is known for its work in restructuring and bankruptcy situations.
BBBY stock price is now trading at $10.80 in premarket Friday after plunging nearly 20% yesterday. Just two days ago, BBBY shares were trading above $26.
Despite a sharp move lower, a Telsey Advisory Group analyst warns the worst is yet to come.
“Bed Bath’s weak financial position, uncertain economic environment, leadership overhaul, poor execution, and lack of clear strategy keep us cautious on the stock,” the analyst said in a client note and reiterated the Underperform rating and a $3 per share price target.
“With the stock still up 272% from the $4.99 it traded at after its last earnings report on June 29, we believe the shares have significant risk to the downside,” she concluded.
The analyst’s comments come a day after Wedbush downgraded BBBY stock to Underperform with a price target of $5.
