MemeMoney: Ryan Cohen and Nordstrom: Another meme stock in the making?

Nordstrom Inc.’s stock surged more than 22% Friday following a report that activist investor Ryan Cohen is taking a large stake in the retailer.

Citing people familiar with the matter, the Wall Street Journal reported that Cohen is amassing a sizable stake in the upscale department store chain, and is also seeking changes to the company’s board.

Cohen is said to be targeting former Bed Bath & Beyond Inc.

CEO Mark Tritton, who has served as a Nordstrom director since April 2020 and is chair of the board’s compensation committee, the paper reported.

Cohen argues that the executive’s former employment at Nordstrom between 2009 and 2016 makes him conflicted and unqualified to set compensation. The activist investor and Tritton have history, with the latter ousted from the Bed Bath & Beyond CEO’s role just months after it emerged Cohen had a stake in the home goods retailer.

Cohen is one of the top-five nonfamily shareholders of Nordstrom
the people said, according to the Wall Street Journal report.

The activist investor’s reported move sparked talk that the retailer could join the list of so-called meme stocks given Cohen’s history with sometime meme stock darlings GameStop Corp.

and Bed Bath & Beyond Inc.

Related: Nordstrom Stock Surges 30% on Report Activist Investor Ryan Cohen Has a Stake

However, several commenters on Reddit’s WallStreetBets, a meme stocks hotbed, were unmoved by the report of Cohen’s Nordstrom stake. “Musical chairs. Let’s see who’s holding the bag this time,” wrote one. “What you are tell me is that the music is about to stop, and we are gonna be left holding the biggest bag of odorous excrement ever assembled,” one commenter responded.

“Fool me once…,” wrote another commenter.

KeyBanc analyst Noah Zatzkin also struck a cautious tone.

“While the news of Cohen’s stake is likely to be positive for short-term share price, we’d require additional clarity on his involvement to better determine potential long-term implications,” the analyst wrote in a note to clients.

KeyBanc has an overweight rating on Nordstrom stock.

Nordstrom has been facing challenges of its own amid a slowdown in sales. Last month Nordstrom slashed its outlook and noted that holiday season sales were “softer than pre-pandemic levels.”

Cohen, the co-founder and former CEO of Chewy Inc.,

made his first investment in GameStop in August 2020 via his investment firm RC Ventures. News of Cohen’s 9% stake in the gaming retailer sent its stock surging. The activist investor quickly began pushing for an overhaul of GameStop, with a focus on digital sales, and he joined the company’s board in January 2021. He consolidated his power at GameStop when he became the company’s chairman in June 2021.

Related: GameStop stock surges after Chewy co-founder takes 9% stake

GameStop’s stock, which had hit an all-time low of 64 cents of April 3, 2020, rocketed to an all-time high of $120.75 on Jan. 28, 2021, amid the meme stocks frenzy. The stock, which is trading around $22 on Friday, has fallen 13.6% in the last 12 months, outpacing the S&P 500 index’s

decline of 8% over the same period.

In March 2022 it also emerged that Cohen held a big stake in troubled home goods retailer Bed Bath & Beyond. The activist investor owned a 9.8% stake in Bed Bath & Beyond through his investment firm, RC Ventures LLC, according to a copy of a letter sent to the company’s board that was viewed by The Wall Street Journal. In the letter, Cohen urged the company’s board to streamline its strategy and explore strategic alternatives.

Cohen also questioned the company’s performance under then CEO Tritton. The former Target Corp. chief merchant was ousted in June 2022, after less than three years in the Bed Bath & Beyond CEO role.

See Now: What’s next for Bed Bath & Beyond after defaulting on its loans?

However, in August 2022 Cohen disclosed his plan to unload his stake in Bed Bath & Beyond, sending the company’s stock plummeting more than 22%.

Last week Bed Bath & Beyond disclosed in a filing that it was in default on loans that have been called in, sending its stock plunging. The filing came just three weeks after Bed Bath & Beyond said it may need to declare bankruptcy. 

Bed Bath & Beyond’s stock has fallen 80.3% in the last 12 months.

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