- Oops!Something went wrong.Please try again later.
Bed Bath and Beyond (BBBY) stock soared 86% at the open on Monday, the most on record after activist investor Ryan Cohen took a 9.8% stake in the retailer. Cohen is pushing for changes, including a possible sale of the company. Shares paired back their gains by mid-morning, but were still trading more than 40% higher.
Cohen's stake in BBBY is reminiscent to his strategy to overhaul GameStop (GME) last year. Cohen is currently chairperson of GameStop with a large social media following among retail investors. They often refer to him as "Papa Cohen."
Bed Bath and Beyond is undergoing a 3-year transformation plan spearheaded by CEO Mark Tritton, a former Target (TGT) executive.
Cohen's RC Ventures wrote a letter to the board with ideas, including separating itself from BuyBuy Baby, and even a sale of the company.
"The final path we want to raise for consideration is a full sale of Bed Bath, in its current form, to one of the many well-capitalized financial sponsors with track records in the retail and consumer sectors and the ability to pay a meaningful premium," Cohen said in a letter obtained by Yahoo Finance.
Cohen also criticized management for taking in big compensations.
In a statement, the retailer said, "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,"
Bed Bath and Beyond was been a "meme" favorite last year. In January, the stock surged despite a top and bottom line miss during its latest quarter. Short interest on the stock is around 25% of the float, which is high. That indicates that upward moves may often be short coverings.
Shares of Bed Bath and Beyond are down about 50% from its 52-week peak reached in June of 2021.
Ines is a markets reporter covering equities. Follow her on Twitter at @ines_ferre