This is Why Bed Bath & Beyond Shares Exploded After GameStop’s Chairman Did This

Shares of Bed Bath & Beyond were soaring on Monday after Wall Street learned that GameStop’s chairman Ryan Cohen had revealed a big stake in the company.

The company saw its stock jump after Cohen revealed he had a nearly 10% stake in the retailer, through his investment company RC Ventures.

Cohen, who is also the co-founder of online pet retailer Chewy, wrote in a letter to Bed Bath’s board that he believes the retailer is struggling to reverse market share losses and to navigate supply chain woes.

According to Cohen, the company should explore selling itself to private equity and spinning off its Buybuy Baby chain.

“We will carefully review their letter and hope to engage constructively around the ideas they have put forth,” Bed Bath said in a statement.

The stock was up 34% Monday after Cohen revealed his stake. The GameStop chairman also criticized top executives, including Bed Bath Chief Executive Mark Tritton, for reaping excessive compensation during periods of underperformance.

“We believe Bed Bath needs to narrow its focus to fortify operations and maintain the right inventory mix to meet demand, while simultaneously exploring strategic alternatives that include separating Buybuy Baby, and a full sale of the company,” said Cohen.

The big-box retailer had said that it has had no prior contact with RC Ventures.

“We will carefully review their letter and hope to engage constructively around the ideas they have put forth,” Bed Bath said in a statement. “2021 marked the first year of execution of our bold, multi-year transformation plan, which we believe will create significant long-term shareholder value.”

With a nearly 10% stake in Bed Bath, Cohen is now a top five shareholder in the retailer.

Wells Fargo analyst Zachary Fadem remarked, “Considering Bed Bath’s 26% short interest and low investor expectations for improving results, today’s likely move higher is understandable.”
Cohen joined GameStop’s board in January 2021.

Disclaimer: We have no position in any of the companies mentioned and have not been compensated for this article.