Bed Bath & Beyond new target for meme-stock leader of GameStop fame

Meme-stock mania is making itself at home at Bed Bath & Beyond now that one of the movement’s leaders took a big stake in the company. After Chewy founder and GameStop chairman Ryan Cohen announced a 9.8% stake in the home goods retailer Sunday, shares soared 85% Monday morning before settling down to a 34% gain on the day.

But activist-investor Cohen, who leveraged a similar stake in GameStop into a leadership position, isn’t investing in Bed Bath & Beyond just to recline on some pillows. He’s there to fluff things up like he did at GameStop, and his involvement with the struggling retailer has Reddit investors buying in.

In a letter to the board, Cohen blasted management for failing to reverse market share losses, excessive executive compensation while the company struggles, and a scattered strategy.

“It appears that trying to execute on dozens of initiatives at once is leading to dozens of mediocre outcomes,” Cohen wrote.

Cohen recommended the company spin off buybuy BABY, the one-stop baby shop he predicts is worth billions, more than Bed Bath & Beyond itself. Analysts have disputed his bold calculations. Cohen is also seeking a sale of the entire company, though skeptics have pointed out that current market conditions mean it may not be the most opportune time to sell.

Bed Bath & Beyond responded to Cohen’s letter on Monday, saying, “While we have had no prior contact with [Cohen’s company], we will carefully review their letter and hope to engage constructively around the ideas they have put forth.”

Unlike his heavy involvement with GameStop, Cohen said he’s not trying to make Bed Bath & Beyond his permanent home. But his stake represents his next step in disrupting the retail industry and the meme-stock generation is once again taking notice.