(Reuters) - Retail favorites GameStop and AMC Entertainment fell on Friday, undoing much of their recent gains after billionaire Ryan Cohen abruptly dumped his stake in struggling retailer Bed Bath & Beyond days after he took a bullish options position in the stock.
Bed Bath & Beyond Inc (NASDAQ:BBBY)'s shares extended their plunge, falling 42% to $10.80, after Cohen said a day earlier he had sold his 9.8% stake in the company, almost five months after amassing it and pushing for changes.
The stake sale could result in a windfall between $55 million and $60 million for Cohen, according to a Reuters review of regulatory filings.
Bed Bath & Beyond's shares shot up to $30 earlier this week after Cohen bought some call options on Tuesday, vaulting from $4.38 in July in frenzied trading that evoked memories of the meme-stock rally of early 2021.
Should losses hold, the stock is set to swallow its weekly gains of 43%.
"If he hadn't sold, this stock seemed to have real potential as GME 2.0. Ryan selling killed any momentum unfortunately," said a retail trader, who had invested in Bed Bath & Beyond when the stock was at $6.
Cohen has about 12% stake in GameStop Corp (NYSE:GME), which at the height of the retail frenzy in January 2020 had shot up 1,600%, and is the largest shareholder.
GameStop and AMC Entertainment were down between 4% and 6%. E-commerce firm Vinco Ventures slumped 17%.
Despite Friday's losses, the stocks were up in the range of 3% to 55% this month.
"This latest rollercoaster isn't likely to extinguish the meme stock trend," said Susannah Streeter, senior investment and markets analyst, Hargreaves Lansdown (LON:HRGV), adding the urge to ride the wave of speculation has gained ground as Wall Street has rallied over recent weeks.