GameStop's Cohen takes stake in Bed Bath & Beyond

STORY: Shares of the highly shorted meme stock Bed Bath & Beyond skyrocketed as high as almost 78% on Monday, after billionaire investor Ryan Cohen said he now owns nearly 10% of the struggling retailer and wants it to explore strategic alternatives that include a full sale of the company.

Cohen, who co-founded online pet products retailer Chewy and is chairman of the board at video game retailer GameStop - another meme stock company - said in a critical letter to the board of Bed Bath & Beyond that the company had an "overly ambitious" "scattershot strategy" and that it's overpaying its top executives.

Cohen took aim at CEO Mark Tritton, saying he has failed to navigate supply chain issues and presided over a 14% drop in core sales from a year ago in the most recent quarter.

Cohen added that Tritton was paid about $27 million over the past two fiscal years, noting it was far more than what CEOs earned at much bigger retailers including Macy's and Kohl's.

Bed Bath & Beyond said it would review Cohen's letter, which also said the retailer might be better off owned by a private equity company.

Bed Bath & Beyond was a part of the meme stocks phenomenon last year where retail investors fueled eye-popping rallies in certain stocks, coordinating through online message boards Reddit and Stocktwits, which cost short sellers billions of dollars.

By midday on Monday, shares of Bed Bath & Beyond had given back about half its gains from the market open.