Bed Bath & Beyond skyrocketed 106% in premarket trading. RC Ventures, an investment firm started by GameStop Corp. Chairman Ryan Cohen, disclosed a large stake in Bed Bath & Beyond Inc. and is pushing the company to explore selling itself.
Mr. Cohen, who also serves as chairman of GameStop Corp. , sent a letter to Bed Bath & Beyond’s board Sunday outlining steps it should take to turn the company around. Bed Bath & Beyond in January reported a big sales decline earlier for its third quarter. Its stock closed Friday at $16.18, down 69% from its 2021 closing high of $52.89.
On social media Monday, individual investors cheered the news of Mr. Cohen’s stake. Mr. Cohen has built a band of loyal followers on Reddit and Twitter, in part, due to his cryptic tweets that frequently go viral online.
The large stake by Mr. Cohen is reminiscent of his move to amass a position in GameStop and lay the groundwork to take over the company’s board. In late 2020, Mr. Cohen disclosed a nearly 10% stake in GameStop through his investment firm RC Ventures LLC and sent a letter to the videogame retailer’s board, urging it to improve the company’s e-commerce and explore other tech-driven opportunities.
In January 2021, Mr. Cohen was added to GameStop’s board—and later ascended to chairman. His addition to the board ignited a frenzy in GameStop shares, sending them to an intraday high of $483 last year after starting the year trading below $20 a share.
In his letter to Bed Bath & Beyond, Mr. Cohen said he wasn’t in a position to join Bed Bath & Beyond’s board personally, but said that doesn’t preclude RC Ventures from seeking to hold Bed Bath & Beyond’s board and management accountable. His letter said Bed Bath & Beyond should narrow its focus and maintain the correct inventory mix to meet demand. He wrote that the company should explore other ideas including a separation of the Buybuy Baby retail chain or a sale of the entire company.
Bed Bath & Beyond was among a number of stocks that surged last year during the meme-stock mania. Its stock price, however, lost steam shortly thereafter but has seen periodic surges of interest among retail investors.