Investors should follow Ryan Cohen's lead and get out of Bed Bath & Beyond as the company faces an uncertain future, according to Wedbush. Analyst Seth Basham downgraded the struggling retailer to underperform from neutral, saying in a note to clients that the activist investor's decision to sell his stake in Bed Bath & Beyond removes a "key support leg" for the company. "Cohen's activist campaign succeeded in obtaining two permanent board seats, and the company has sought to address several issues highlighted by RC, including a reassessment of its owned brand strategy, inventory mix, and management structure (including the departures of former CEO Mike Triton and CMO Joe Hartsig)," Basham wrote. "More pressing, however, is BBBY's cash burn and the prospects for further financing needed to shore up its balance sheet and rebuild supplier confidence." Cohen said in a filing released Wednesday that he intends to sell his entire stake in Bed Bath & Beyond, which totals roughly 11.8% of the company's shares when including his options positions. It is unclear whether Cohen has already sold his stock. Shares of Bed Bath & Beyond were down 10% in premarket trading, reversing some of the massive gains the stock has seen in August during a revival of the Reddit-fueled meme trade. Basham said that the company's valuation in the stock market is "disconnected" from its fundamentals, creating downside risk for shareholders even if Bed Bath & Beyond can execute a turnaround. "BBBY finds itself in an unenviable position as it faces steep market share losses, an overabundance of inventory and dwindling cash reserves. Quickly fixing these issues will be challenging, particularly given the soft demand environment, continued rapid sales declines and a weak balance sheet, adding significant risk to the company's prospects," Basham wrote. Wedbush maintained its price target of $5 per share for Bed Bath & Beyond, which is almost 80% below where the stock closed on Wednesday.