Pomerantz Appointed Co-Lead Counsel in Bed Bath & Beyond Securities Litigation
On November 16, 2022, U.S. District Judge Trevor N. McFadden, of the District of Columbia, appointed Pomerantz LLP as Co-Lead Counsel on behalf of its client, Bratya SPRL, which serves as the Lead Plaintiff, and the class, in In re Bed Bath & Beyond Corporation Securities Litigation, 22-cv- 2541 (D.D.C.). This securities action alleges that the defendants artificially inflated the stock price of Bed Bath & Beyond Corporation ("BBBY" or the "Company") by misrepresenting the value and profitability of BBBY.
BBBY, together with its subsidiaries, operates a chain of retail stores that sells a wide assortment of merchandise in the home, baby, beauty and wellness markets. The Company operates stores under the names Bed Bath & Beyond, buybuy BABY, Harmon, and Harmon Face Values.
Allegations include that the defendants knowingly engaged in a scheme to deceive BBBY’s public investors through manipulative and deceptive acts for the purpose of artificially inflating the price and trading volume of BBBY securities so that activist investor Ryan Cohen (“Cohen”) and his investment firm, RC Ventures LLC (“RC Ventures”), could sell those shares at inflated prices at the expense of BBBY’s public investors.
On March 6, 2022, Cohen, through RC Ventures, sent a letter to BBBY’s board, criticizing the Company’s management, and revealing that he owned a 9.8% stake in the Company. On this news, BBBY’s share price climbed 34%.
On March 25, 2022, BBBY announced that it had entered into a cooperation agreement with Cohen and RC Ventures. As part of the agreement, three directors designated by RC Ventures would join the Company’s Board of Directors as new independent directors.
Then, on August 15, 2022, RC Ventures announced that it had purchased more than one million January 2023 call options with exercise prices at $60, $75, and $80—all significantly higher than the price BBBY shares were then trading. On this news, BBBY’s share price climbed 29%.
The truth emerged on August 18, 2022, when RC Ventures revealed that it would sell its entire stake in BBBY. Also on August 18, 2022, Bloomberg published an article titled “Bed Bath & Beyond Taps Kirkland & Ellis for Help Addressing Debt Load,” reporting that the Company had hired a prominent law firm for help with its debt. On this news, BBBY’s share price fell 52.2%.