Bed Bath & Beyond Surges as Activist Ryan Cohen Pushes for Sale

(Bloomberg) — Bed Bath & Beyond Inc. shares rallied in premarket trading Monday after Ryan Cohen’s investment firm RC Ventures disclosed a 9.8% stake in the retailer and asked that it consider a sale of the whole company.

Most Read from Bloomberg

The Union, New Jersey-based home goods retailer jumped as much as 55% in early trading after Cohen said Bed Bath & Beyond should consider selling itself to a well-capitalized buyer or sell its baby products business. In a letter sent to the company’s board Sunday, RC Ventures said its executives received “outsized” compensation relative to its performances.

Read more: Gamestop Chairman Cohen Discloses Stake in Bed Bath & Beyond

Bed Bath & Beyond said Monday it will carefully review a letter from RC Ventures pushing it to explore a sale, and hopes “to engage constructively” with the company.

Cohen, co-founder of Chewy Inc. and chairman of GameStop Corp., has had a strong following of retail traders who piled into shares of both the pet supplies provider and video-game retailer at the height of the coronavirus pandemic with consumers stuck at home. GameStop surged 688% last year and 210% in 2020.

Bed Bath & Beyond, a darling of so-called meme-stock traders, reported quarterly sales that missed estimated and reduced its outlook for sales and adjusted earnings per share for the current fiscal year when it released results last month. It had to increase prices and adjust its discount strategy due to freight and supply-chain headwinds.

Last year, it was one of the first retailers to show how a Covid-19 variant was affecting its supply chain, changing consumer behavior and eroding sales. It then announced an accelerated share buyback program and the launch of a new digital marketplace for merchandise from third-party producers.

Its shares have slumped 42% in the past 12 months, while the S&P 600 Consumer Discretionary Index was 9.7% lower and the S&P 500 was little changed in that period.

(Updates with share price move, company comment and more details throughout.)