One Meme to Another: Gamestop Chairman Takes Stake in Bed Bath & Beyond

As the chairman of Gamestop, billionaire investor Ryan Cohen is already in the role of purported savior of a struggling retail firm beloved by unpredictable meme stock traders. Now he’s expanding the job. Cohen has taken a big stake in…

Jennifer
Image Credit: iStock, JHVEPhoto
Sign up for insightful business news.

As the chairman of Gamestop, billionaire investor Ryan Cohen is already in the role of purported savior of a struggling retail firm beloved by unpredictable meme stock traders. Now he’s expanding the job.

Cohen has taken a big stake in Bed Bath & Beyond, a company beloved by people in need of throw pillows and Redditors who like juicing stocks. His plan of attack includes bashing the company’s “scattershot strategy” and pushing for a sale to a private equity owner. Drama awaits.

Bed Bath & Beyond a Reasonable Doubt

Bed Bath & Beyond has a market cap of approximately $1.6 billion, but it hasn’t exactly covered itself in glory of late. Shares have fallen about 43% in the last year, the company’s core sales fell 14% in the last quarter, and it’s been losing market share and valuation for years.

None of those things stopped the company’s executives from collectively accepting $36 million in compensation in the last fiscal year, which Cohen has criticized as excessive. Notably, CEO Mark Tritton’s $27 million compensation in the last two years is more than the heads of much bigger retail firms like Macy’s, Dollar Tree, and Kohl’s.

So what does Cohen — who now owns 9.8% of Bed Bath & Beyond through his investment firm RC Ventures — want the company to do?

  • Sell. In a letter delivered to Bed Bath & Beyond, Cohen’s firm said it believes the company could unlock billions in value if it narrows its focus and considers a sale to private equity.
  • Spin. Narrowing the company’s focus would require spinning off units, such as its Buybuy Baby chain which Cohen believes could be worth several billion dollars; Bank of America analysts estimated the brand could be generating as much as $1.2 billion in annual sales.

Second Time at the Rodeo: In 2019, Bed Bath & Beyond emerged from a heated spat with three activist investors angry that it had failed to boost its e-commerce presence relative to retail competitors. The activists got four board members out of it, though what Cohen gets remains to be seen.

Analysis more

Tale of the Tape: Warren Buffett and Cathie Wood

Farm Strong: Understanding Agriculture as an Investment

Recent News

Carmakers Circle as Vale Weighs Selling a Stake in Metals Unit

Lab-Grown Foie Gras Startup Scores Fundraising Round

US, EU React to OPEC+ Agreement to Slash Oil Production

Thrift Store King Goodwill Goes Digital

[subscribe-form listid="1ebbb697aaa44fb1971fe0a3c42ff841" source="organic" medium="organic" redirect-url="https://thedailyupside.com/thank-you/"]
<form action="" class="subscribe-form "> <input type="text" name="subscribe_form_email" placeholder="Enter your email"> <input type="text" name="subscribe_form_name" placeholder="Enter your name" value="" class="c-subscribe-from_field"> <button class="c-btn" id="subscribe-form-submit" type="submit">Subscribe</button> <div class="subscribe-form-message"></div> <div class="subscribe-form-vars"> <input type="hidden" class="subscribe-form-param" name="params[listid]" value="1ebbb697aaa44fb1971fe0a3c42ff841"> <input type="hidden" class="subscribe-form-param" name="params[source]" value="organic"> <input type="hidden" class="subscribe-form-param" name="params[medium]" value="organic"> <input type="hidden" class="subscribe-form-param" name="params[redirect_url]" value="https://thedailyupside.com/thank-you/"> </div> </form>