Nordstrom (NYSE:JWN) stock rose 6% on Feb. 2 and another 30% overnight after investor Ryan Cohen took a “significant stake” with an eye toward board changes.
Cohen wants former Bed Bath & Beyond (NASDAQ:BBBY) CEO Mark Tritton ousted from the Seattle company’s board. Cohen led an attack on BBBY stock last year, which led to Tritton’s replacement, but that company now appears headed for bankruptcy.
One Meme Wonder
Cohen made his initial fortune building Chewy (NASDAQ:CHWY), an online pet food retailer. He sold it to rival Petsmart and a private equity firm in 2017. The buyers later took Chewy public successfully.
Cohen gained fame in 2021 by leading small investors into GameStop (NYSE:GME), a game software retailer of which he is now board chairman. Since he was announced as chairman, GME stock is down 42%. After leading small investors into BBBY last year, Cohen sold his entire position in August, reporting it after he was out and the company was tanking.
Nordstrom is expected to report its Christmas quarter results on March 2. The company lost $20 million, 13 cents per share, on sales of about $3.5 billion for the October quarter. Additionally, the company has warned that Christmas sales would be slow. Shares were down 4% in the previous year before Cohen’s announcement. They’re now trading near their April high.
Coen argues that Tritton, who heads the board’s compensation committee, has a conflict of interest, having worked with people whose salary he now determines. Tritton worked for Nordstrom before going to Target (NYSE:TGT) and later Bed Bath & Beyond.
Members of the founding Nordstrom family still own about 30% of the company’s stock, making it difficult for Cohen to effect change without their cooperation.
What Happens Next for JWN Stock?
Dumping Tritton won’t solve Nordstrom’s problem. It is selling name brand clothing in big malls at a time when people are dressing down even at the office.
Investors at Reddit’s r/WallStreetBets and Stocktwits seemed skeptical about Cohen’s motives given his track record. So am I. If you’re going in on the speculation, know when to get out.
On the date of publication, Dana Blankenhorn held no positions in any companies mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.