Bed Bath & Beyond investors have spent $200 million trading 'worthless' shares — will this holding company help them?

By James Rogers

Bed Bath & Beyond filed for chapter 11 in April, but the stock continues to attract meme-like attention

Shares of bankrupt Bed Bath & Beyond Inc. rose 3% Wednesday, with the meme stock maintaining its appeal to some investors, despite the retailer's well-publicized woes.

Bed Bath & Beyond (BBBYQ)filed for chapter 11 in April and was subsequently delisted from the Nasdaq Composite. Trading over the counter since May 4, and with liquidation sales under way at hundreds of stores, the stock nonetheless continues to attract attention.

Since the bankruptcy filing, Bed Bath & Beyond investors have spent almost $200 million trading "theoretically worthless" shares, the Financial Times reports. The fallout from other high-profile bankruptcies has also created shockwaves in recent years.

Related: Bed Bath & Beyond: from home-goods behemoth to bankruptcy

Less than a month after filing for chapter 11 in May 2020, Hertz Global Holdings Inc. (HTZ)floated a surprise plan to sell up to $500 million worth of shares. Even the company itself warned that the shares could be "worthless." Hertz subsequently pulled the share offering amid scrutiny from securities regulators.

There is plenty of chatter about Bed Bath & Beyond on Reddit and Twitter, with some users citing the retailer and "Teddy," an apparent reference to Teddy Holdings, which last year filed a series of trademark applications with the U.S. Patent and Trademark Office. The applications span a number of products, from furniture, mirrors and picture frames to coats, online interactive children's stories and online computer games. But, at this stage, there is no indication that Teddy Holdings will play a part in Bed Bath & Beyond's bankruptcy process.

The address listed for Teddy Holdings is the same as the address listed in a trademark application for Teddy Publishing encompassing "downloadable fiction books on a variety of topics." Teddy Publishing is the publisher of a series of children's books written by activist investor Ryan Cohen.

Related: GameStop snapback continues after Ryan Cohen's election as executive chairman, CEO firing

Cohen, the co-founder and former CEO of Chewy Inc. (CHWY), is executive chairman of GameStop Corp. (GME) and looms large in the meme stocks world. Last year Cohen cashed out his entire stake in retailer Bed Bath & Beyond with more than $58 million profit.

Despite Cohen ditching Bed Bath & Beyond, the activist investor and Teddy Holdings continue to be mentioned in social-media chatter about the troubled home goods retailer.

"$BBBYQ, it's your time to shine under TEDDY!" tweeted @kaismaalej on Wednesday morning.

Related: Ryan Cohen attacks corporate America, and social media reacts: 'Some of the realest truth in business today'

In his Twitter bio, Maalej describes himself as an activist shareholder. In a video posted Tuesday, he talked up a potential link between Bed Bath & Beyond and Teddy Holdings. "The only way for Teddy Holdings LLC to be trading at the public market is through an IPO, which is not going to happen, or through a SPAC, which is not going to happen, or through a reverse merger with Buy Buy Baby or whatever, Bed Bath & Beyond, it doesn't matter," he said. "We need the ticker BBBYQ for Teddy to be trading in the public market, so my advice is hold, hold, hold strong."

"$BBBYQ taking off this week" tweeted @Ape_Rambo on Wednesday morning. "Me and my buddy on the moon after $TEDDY $BBBYQ," added @Ape_Rambo, in a subsequent tweet.

But there was also skepticism about Bed Bath & Beyond on social media. "What best describes what the maniacs who still foolishly believe $BBBYQ equity has value are about to run into?" wrote @Tiggersdad2.

-James Rogers

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07-06-23 0718ET

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