'Big Short' legend Michael Burry invested in Bed Bath & Beyond at least twice before the meme stock's epic rise and fall
Burry's Scion Asset Management purchased 750,000 shares of the homewares retailer in the third quarter of 2019, securing a stake worth $8 million on September 30 that year. BBBY was its sixth-largest position out of eight total holdings, and made up 13% of its $60 million US stock portfolio at the time.
Scion exited the wager during the next quarter, only to reinvest a few months later, filings show. It owned 1 million BBBY shares worth almost $11 million on June 30, 2020. Excluding options, the retailer was its number-two position after a nearly $12 million stake inHowever, Burry once again closed the bet over the next three months, meaning he got out before the meme-stock boom in January 2021.
Burry may have missed out on a big windfall by selling his stock, but he also avoided a dramatic decline. BBBY has plummeted by more than 95% from its 2021 peak to below $2 a share today, reflecting the retailer's onerous debts, inventory woes, and warnings of potential bankruptcy. The company staved off disaster by signing a $1 billion deal with Hudson Bay Capital and other institutional investors in February. Yet Burry"It's time memesters look up what a death spiral convertible is," he said. Burry was referring to a situation where a shareholder keeps converting preferred stock into common stock at a discount to the market price, then sells the resulting shares, driving the stock price ever lower.
Burry isn't the only notable investor to show interest in BBBY. Meme-stock specialist and GameStop chairman Ryan Cohen
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