Shares Surge As GameStop Chairman Reveals Stake
In early trading on Monday, Bed Bath & Beyond stock jumped more than 50% (but ended the day with a 34% gain) when GameStop Chairman Ryan Cohen revealed that his investment firm, RC Ventures, owned a roughly 10% position in the business. In a letter to Bed Bath & Beyond's board, Cohen, who also co-founded the online pet store Chewy, said that he believes the retailer is struggling to recover market share losses and negotiate supply chain issues.
- He also blamed top executives for receiving bonuses during periods of poor performance
- Ryan Cohen expects the company could fare better if it kept a narrower focus and optimised its inventory levels
- His firm is also exploring the potential for breaking up the company in smaller and better managed parts
Bed Bath & Beyond Hope To Engage Constructively
Bed Bath & Beyond said it had received the letter from RC Ventures and will be reviewing it. The company stressed its ongoing turnaround efforts.
"Bed Bath & Beyond's Board and management team maintain a consistent dialogue with our shareholders and, while we have 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."
"Our Board is committed to acting in the best interests of our shareholders and regularly reviews all paths to create shareholder value. 2021 marked the first year of execution of our bold, multi-year transformation plan, which we believe will create significant long-term shareholder value." Bed Bath & Beyond Comments on letter from RC Ventures
Mr. Cohen's large stake in Bed Bath & Beyond reminds investors of his move to acquire a stake in GameStop and takeover the company's board of directors. Through his investment firm RC Ventures, he disclosed a nearly 10% holding in GameStop at the end of 2020 and wrote a letter to the gaming retailer's board of directors, asking it to strengthen the company's e-commerce and seek other tech-driven options.
- Ryan Cohen was then appointed to GameStop's board of directors in January 2021 and then promoted to chairman
- After his appointment to the board, GameStop stock soared to a high of more than $450, while the company was trading for around $ 4 a share in the previous year
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