Bed Bath & Beyond stock in focus after CFO death ruled a suicide, shareholder lawsuit
Bed Bath & Beyond's 52-year-old CFO died by suicide on Friday
This story discusses suicide. If you or someone you know is having thoughts of suicide, please contact the Suicide & Crisis Lifeline at 988 or 1-800-273-TALK (8255).
Shares of Bed Bath & Beyond slid following a tragic weekend for the home goods retailer amid even more questions about its future.
Bed Bath & Beyond confirmed that Chief Financial Officer Gustavo Arnal, 52, died on Friday. Police said Arnal fell from the iconic Jenga Tower skyscraper in downtown Manhattan. A spokesperson for the New York City Medical Examiner’s Office confirmed to FOX Business that Arnal took his own life and suffered multiple blunt trauma injuries.
"Gustavo will be remembered by all he worked with for his leadership, talent and stewardship of our Company. I am proud to have been his colleague, and he will be truly missed by all of us at Bed Bath & Beyond and everyone who had the pleasure of knowing him," Harriet Edelman, independent chair of the company's board of directors, said in a statement. "Our focus is on supporting his family and his team and our thoughts are with them during this sad and difficult time. Please join us in respecting the family's privacy."
On Monday, the company named finance insider Lauren Crossen as interim CFO.
BED BATH & BEYOND ISSUES STATEMENT ON DEATH OF CFO GUSTAVO ARNAL: ‘WILL TRULY BE MISSED’
Arnal's death came a few days after the company said it would be laying off 20% of its workforce across corporate and supply chains and closing 150 "lower-producing" stores as part of a new strategy to turn its struggling business around. Bed Bath & Beyond also secured more than $500 million in new financing and said it could potentially launch an at-the-market offering for up to 12 million shares of its common stock.
Before the death of its CFO, the stock lost nearly 70% of its value this year, and new questions have come to light about the retailer's finances.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| BBBY | NO DATA AVAILABLE | - | - | - |
| JPM | JPMORGAN CHASE & CO. | 246.25 | -3.47 | -1.39% |
Arnal, GameStop chairman Ryan Cohen and J.P Morgan Chase have been accused in a class action lawsuit of a "pump and dump" scheme to artificially inflate the company's stock.
GameStop CEO, Chewy.com founder Ryan Cohen
According to the Aug. 23 complaint filed by Bed Bath & Beyond shareholder Pengcheng Si, Cohen approached Arnal in March about his plan to accumulate shares and assume command of the company’s public float.
"With control over a significant portion of the public float, Cohen would essentially act as a price support for the stock while Gustavo would act in a similar capacity by controlling the sale of shares by Insiders," the lawsuit states. "Under this arrangement, defendants would profit handsomely from the rise in price and could coordinate their selling of shares to optimize their returns."
The suit alleges that Cohen, Arnal and J.P. Morgan Chase allegedly discussed hyping up the stock and exiting their positions during several occasions between March and August. According to the suit, Bed Bath & Beyond stock climbed from $4.38 per share on July 1 to $30 per share on Aug. 17. The filing claims that shareholders lost approximately $1.2 billion as of Aug. 23 as a result of the scheme.
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In March, Cohen acquired a 9.8% stake in Bed Bath & Beyond through his venture capital firm RC Ventures.
In an updated 13-D filing on Aug. 15 with the Securities and Exchange Commission, RC Ventures disclosed that it beneficially owned 9,450,100 shares, or 11.8% of the company's roughly 80 million outstanding shares, including 1,670,100 shares underlying certain call options. On Aug. 17, RC Ventures dumped the entire stake.
Meanwhile, Arnal sold 55,013 shares through multiple transactions on Aug. 16 and 17. The shares were sold under a 10b5-1 trading plan at prices ranging from $20 per share to $29.95 per share. After the sale, Arnal still owned 255,396 shares.
Bed Bath & Beyond
A spokesperson for Bed Bath & Beyond told FOX Business that it is in the early stages of evaluating the complaint but believes the claims are "without merit" based on current knowledge of the company. J.P. Morgan Chase declined to comment and a representative for RC Ventures did not immediately return FOX Business' request for comment.