Ryan Cohen has yet to make any material difference to GameStop. But he's making a giant improvement to his own portfolio: $656 million, also thanks to Bed Bath & Beyond.
In less than two years, Cohen, the 35-year-old founder of online pet store Chewy, has made more than $650 million on his investments in GameStop and now Bed Bath & Beyond. It's part of an effort for the young investor to find deeply distressed stocks, announce his involvement, and watch the gains roll in. The way investors pile into stocks Cohen is involved in is similar to bump-ups enjoyed by those Warren Buffett or Carl Icahn invest in.
Shares of Bed Bath & Beyond surged more than 30% Monday on the regulatory filing showing Cohen took a 9.5 million share stake in the company's stock. That amounts to roughly 10% of the retailer's 95.8 million shares outstanding. Cohen is pushing the board to make changes to the business. Shares of the home goods seller, part of the "meme stock" rebellion, had been down nearly 50% in the past 12 months. The S&P 500 in that time is up more than 13%.
But Cohen is showing an uncanny ability to make money for himself just throwing his name around.
Cohen Scores On GameStop As Others Suffer
Cohen's biggest score is still GameStop. And that's even while his personal involvement as chairman has yet to pay off in any fundamental way.
He's now hauled in $600 million in gains on his three purchases of the struggling video-game seller. His initial purchase of 6.5 million shares in September 2020 rocketed nearly 1,000% in value, putting more than $600 million into his pocket. His second buy in late 2020 is now up more than 300% to a gain of $106 million.
But reality is setting in. Shares of GameStop are now down more than 40% in a year's time. And that's despite Cohen's big plans for the company. Cohen took over as director of the company on Jan. 11, 2021. And he's vowed to launch GameStop into digital businesses like non-fungible tokens (NFTs) and online games distribution. And yet, the company lost an adjusted $138.8 million, or $2.14 a share, in 2021. That actually reversed a $19.1 million, or 22 cents a share gain, in 2020. Revenue in 2021 also dropped more than 20%.
Analysts don't see much improvement. The company is seen losing $122.97 million, or $1.69 a share, in 2022. And losing money again in 2023. And Cohen is now down roughly $107 million on his third GameStop investment in the first quarter of 2021.
The Cohen-Effect At Bed Bath & Beyond
Now, it's Bed Bath & Beyond's turn to fell the "Cohen effect."
Cohen pocketed more than $53 million on his 9.5 million share stake in Bed Bath & Beyond based on the date that disclosure was required, on Feb. 24. He's been accumulating shares since early this year. And again, he hasn't done anything yet to improve the company's fortunes.
He did, though, issue a strongly worded letter to the company's board. He's calling for change at the company, but holds no managerial role there. "In March 6, 2022, the Reporting Persons delivered a letter to the Board (the "Letter") encouraging the Board to adjust the Issuer's strategy and explore alternative paths to value creation. Specifically, the Reporting Persons expressed their belief that the Issuer should narrow its focus to fortify operations and maintain the right inventory mix to meet demand, while simultaneously exploring strategic alternatives that include separating buybuy Baby, Inc. and a full sale of the Issuer," the filing said.
But when your name alone is worth millions, it's the announcement that matters most.
Cohen's Magic Touch
| Company | Symbol | Shares bought (purchase date) | Invested value at disclosure ($ millions) | Value now ($ millions) | Gain / loss ($ millions) |
|---|---|---|---|---|---|
| GameStop | 6,500,000 (9/20/20) | $61.6 | $664.9 | $603.4 | |
| GameStop | 1,274,600 (12/31/2020) | $24.0 | $127.5 | $106.4 | |
| GameStop | 1,226,400 (3/31/2021) | $232.8 | $122.7 | -$110.1 | |
| Bed Bath & Beyond | 9,450,100 (2/24/2022) | $145.2 | $198.7 | $53.5 | |
| Total | $655.9 |
