Courtesy of Chewy.com
- Ryan Cohen is building a significant stake in Nordstrom, The Wall Street Journal reported.
- The Chewy cofounder and GameStop chairman wants to refresh the company's board, The Journal said.
- Cohen has made several bets on ailing retailers, including GameStop and Bed Bath & Beyond.
Nordstrom shares soared as much as 37% in premarket trading on Friday, as investors cheered the news that Ryan Cohen may be building a significant stake in the luxury department-store chain.
Cohen, the billionaire cofounder of Chewy and chairman of GameStop, is now one of Nordstrom's five largest non-family shareholders, The Wall Street Journal said, citing people familiar with the matter. The activist investor plans to engage with the company's board and push for at least one of its directors to be replaced, The Journal reported.
Nordstrom shares have plunged by roughly 75% over the past eight years, slashing the company's market capitalization from a peak of $15 billion to below $4 billion as of Thursday's close. The shares were up 26% at $26.65 as of 7:40 a.m. ET Friday.
Like many predominantly brick-and-mortar retailers, Nordstrom has struggled to navigate the shift from in-person to online shopping. Cohen has targeted several companies in similar positions, making him a key figure in the meme-stock craze, where retail investors pile into cheap, unloved stocks to punish short sellers and pocket big returns.
For example, he bought into GameStop in August 2020, which helped to galvanize an epic spike in the video-game seller's stock price in January 2021. He continues to serve as the company's chairman and is working to modernize its business. Cohen also bet on Bed Bath & Beyond last spring, but sold his stake for an estimated $68 million profit in August.
Cohen has ventured outside of the retail space too. He built an Alibaba stake worth hundreds of millions of dollars in the second half of 2022, The Journal reported in January. He also plowed virtually all of his profits from selling Chewy in 2017 into just two stocks, Apple and Wells Fargo.
With Nordstrom, the e-commerce specialist may be seeking to emulate one of his role models, Warren Buffett, who specializes in identifying and investing in undervalued businesses. Ted Weschler, one of Buffett's deputies, made a similar play when he built a nearly 6% stake in Dillard's in 2020 (he sold the position in 2021 for a roughly five-fold return.)
"Value doesn't move but stock prices do, creating an opportunity if you have the right temperament to buy stuff on sale," Cohen told Insider in a 2021 interview.