Why Bed Bath & Beyond Stock Tanked Today
What happened
It seems there might be a fight in the works for control of retailer Bed Bath & Beyond (NASDAQ: BBBY). On news that a recently arrived major shareholder seems to be gearing up for a scuffle, investors scurried away on Thursday, trading the company's stock down by almost 7%.
So what
That shareholder is RC Ventures, headed by activist investor Ryan Cohen. The founder of the pet goods company now known as Chewy, Cohen is perhaps best known for his recent involvement with video game retailer GameStop, where he is now the chairman of the board.
Image source: Getty Images.
On Thursday, Reuters reported that RC Ventures has hired a proxy solicitor, which is essentially a third party that polls company stockholders on how they plan to vote on contended corporate matters.
Citing two sources apparently with knowledge of the situation, the news agency said the proxy solicitor is Harkins Kovler, the firm that is often used by veteran activist investor Carl Icahn in his efforts to change the policies and control of various publicly traded companies.
The report follows Monday's news that Cohen's company had taken a stake of just under 10% in Bed Bath & Beyond. In an open letter to the retailer's board of directors, Cohen wrote that the company "is struggling to reverse sustained market share losses, stem years-long share price declines and navigate supply chain volatility."
He also accused management of drawing "outsized" pay packages for their work, among other allegations.
Now what
The last thing a retailer needs is a bruising proxy fight, particularly in this difficult environment where the world still isn't fully past the pandemic and those supply chain issues persist. Cohen seems determined to stir one up, so we should expect turbulent times at the top of Bed Bath & Beyond.
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Eric Volkman has no position in any of the stocks mentioned. The Motley Fool owns and recommends Chewy, Inc. The Motley Fool has a disclosure policy.
