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Tuesday, March 21, 2023


Nordstrom Shares Jump After Meme-Stock Activist Investor Ryan Cohen Builds Stake

Shares of Nordstrom jumped Friday in premarket trading following news that meme-stock activist investor Ryan Cohen has amassed a large stake in the department-store chain. 

WSJ, citing people familiar with the matter, reported Thursday night that Cohen acquired a “sizable stake” in Nordstrom and is one of the top-five nonfamily shareholders of the department store chain. His goal is to make drastic changes to the board. 

“While Mr. Cohen hasn’t sought any discussions with us in several years, we are open to hearing his views, as we do with all Nordstrom shareholders,” a Nordstrom spokeswoman said in a statement. 

The spokeswoman added:

“We will continue to take actions that we believe are in the best interests of the company and our shareholders.”

Ryan Cohen’s RC Ventures fund is popular with Redditors on the r/wallstreetbets subreddit, also known as Wall Street Bets (WSB), for taking positions in stocks like Bed Bath & Beyond and GameStop.

The news about Cohen comes after shares have been more than halved since reaching a high of $45 per share in early 2021. Shares have since slid due to an inventory glut, lackluster holiday sales, and a deteriorating outlook for this year. 

Nordstrom traded as high as 28% in premarket trading. 

A snapshot of Nordstrom via Bloomberg data shows about 23% of the float is short. 

For more on Cohen’s move, Bloomberg provides a list of what several Wall Street analysts are saying: 

Gordon Haskett analyst Chuck Grom upgrades Nordstrom to hold from reduce (PT $22)

  • “While we adamantly believe in the negative case on the fundamental side of Nordstrom’s business…we are also cognizant that a refresh at the board level is arguably long overdue”
  • Sees activist activity derisking the downside scenario for Nordstrom

KeyBanc Capital Markets analyst Noah Zatzkin (overweight, PT $22)

  • Says news is “likely positive” for share price Needs more clarity on level of involvement to weigh long-term implications

BMO Capital Markets analyst Simeon Siegel (market perform, PT 20)

  • Says Cohen “brings a spotlight that should not be ignored”
  • Notes, however, the company is “clearly challenged,” adding that while shares seem cheap, “numbers appear high”

However, WSJ noted that execs at the company adopted a poison pill to thwart outsiders, such as Cohen, from boosting their stake in the company to make radical changes. 

This post was originally published on this site

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