Ryan Cohen is one of the most polarizing investors of the millennial generation. Most known for his record sale of online pet-retailer Chewy, and his executive chairman role at GameStop (NYSE:GME). Next to Warren Buffett, Cohen's fortune may be small, but there are similarities between the two that could make Cohen the Buffett of the millennial generation.
Cohen started working at 13, building websites for family members and local businesses. At 15, he started a business where he collected fees from various websites through affiliate marketing. With a vision to build an e-commerce company, he and partner Michael Day built a website for online jewelry sales.
The idea was scrapped one week before its scheduled launch when Cohen was shopping for his dog at his local pet store, where he had the revelation that he was in the wrong industry. The pair pivoted, sold their inventory, built a new website surrounding pet supplies and started learning everything they could about the industry.
Within months, the business launched under the name MrChewy, which was later named Chewy Inc (NYSE:CHWY). In 2013, Chewy secured a $15 million investment from Volition Capital to scale its business — and in 2014, Chewy opened a 400,000-square-foot facility to bring its fulfillment in-house.
With the company growing at a rapid pace, Cohen was approached by competitor PetSmart, who were seeking to acquire Chewy. A short time later, PetSmart acquired Chewy for $3.35 billion in what is known to be the biggest e-commerce acquisition in history.
In March 2018, Cohen left the company to pursue personal goals.
Activist Investor:
Shortly after the sale, Cohen made an investment in Apple Inc (NASDAQ:AAPL) that would make him the largest individual shareholder of the company with over 1.5 million shares. In 2020, Cohen’s firm, RC Ventures disclosed a 10% stake in GameStop, which was later increased to 12.9%, making him the largest individual shareholder in GameStop.
Per the SEC filing, RC Ventures expressed a willingness to deliver value to GameStop shareholders, and to get involved with the company’s operations.
In 2021, GameStop named Cohen a board member in charge of leading a company-wide transformation.
In 2022, RC Ventures disclosed that it had an almost 10% stake in Bed Bath & Beyond (NASDAQ:BBBY) — and today, in order to avoid a proxy battle, Bed Bath & Beyond entered a cooperation agreement with Cohen to allow him to add three new members to its board of directors focused on exploring alternatives to unlock greater value from the company's buybuy BABY banner.
Also Read: Warren Buffett Owns What? 10 Berkshire Acquisitions You May Have Forgotten
Does any of this sound Buffett-esque?
In 1961, Buffett bought 23% of Sanborn Map Company’s outstanding shares as an activist investor, earning him a seat on the company’s board, where he aligned himself with other dissatisfied shareholders. Buffett understood that the company’s investment portfolio was worth $65 per share, but the stock was being sold for $45 per share.
With 44% of the shares in control of Buffett and disgruntled shareholders, Sanborn avoided a proxy battle by offering to repurchase the shares at fair value. 77% of those shares were repurchased, leaving Buffett with a 50% return.
Like Cohen, Buffett had an early start in business, spending much of his childhood as an entrepreneur. In high school, Buffett detailed cars, delivered newspapers, and sold stamps and golf balls. He and a friend purchased a pinball machine for $25, within months they owned several machines, and ultimately sold the business for $1,200.
With a keen interest in investing and business, Buffett held several roles in the finance industry before taking control of textile manufacturing company Berkshire Hathaway (NYSE: BRK-A)(NYSE: BRK-B) in 1966.
In 1973, Berkshire began acquiring stock in the Washington Post Company that eventually led to Buffett taking a seat on the company’s board of directors.
In 1987, Buffett purchased a 12% stake in Salomon Inc, making Buffett the largest shareholder, earning him a seat on the company’s board.
In 1970, Buffett became the chairman and CEO of Berkshire Hathaway.
While the Berkshire portfolio is exceptionally large, holding 65 companies with over 260 subsidiaries, and RC Ventures currently holds just two positions, Cohen is 36, and Buffett is 91.
Give it a few decades, and we could end up with another BRK-A.
Photo: Courtesy of Bill Jerome on Flickr
