May 19, 2022


Fine Art Of Business

GameStop’s Ryan Cohen isn’t the second coming of Warren Buffett: top analyst

3 min read

GameStop Chairman Ryan Cohen has a long way to go before being mentioned in the same breath as investing legend Warren Buffett.

At least that’s the hot take from top Wall Street analyst Anthony Chukumba of Loop Capital Markets, who famously dropped coverage of GameStop in early 2021 amid the meme stock frenzy.

“I am not taking anything away from Ryan Cohen. He has at least three zeros in his net worth more than I do. He founded this company Chewy and sold it for a gazillion dollars. But let’s just rid ourselves of this notion that somehow he is the next Warren Buffett, because he is not,” Chukumba said on Yahoo Finance Live. “He bought a big stake in GameStop. He became the chairman. He brought in all these executives and board members. The stock went up a ton. But have the fundamentals of the business gotten any better? Any better at all? The answer is no. And by the way, the stock peaked at $483. It’s now down to about $150.”

To be sure though, the founder of Chewy is trying to flex his investing chops in his second career act.

Cohen disclosed a 9.8% stake in struggling home goods retailer Bed Bath & Beyond earlier in March.

Cohen said in a scathing letter to Bed Bath & Beyond that the company’s execution under CEO Mark Tritton has bordered on terrible, compensation is not realistic and the business should be split up (buybuy Baby should be sold) and then sold entirely to financial sponsors (aka private equity).

Cohen believed Bed Bath & Beyond could unlock billions in shareholder value by narrowing its focus and selling itself in parts.

Bed Bath & Beyond reached a settlement deal with Cohen several weeks later, again bolstering his standing among his retail investor following. Three board members were immediately added to the retailer’s board: Marjorie L. Bowen, Shelly C. Lombard, and Ben Rosenzweig.

Bowen and Rosenzweig will join that aforementioned committee focused on exploring alternatives to unlock value from the company’s buybuy BABY banner.

Chukumba says that similar to Cohen’s move at GameStop, he hasn’t fundamentally altered Bed Bath & Beyond.

“It’s the same thing with Bed Bath & Beyond. He bought a stake in Bed Bath & Beyond, but he said you can easily take this thing private. No you can’t. He also said the market cap of buybuy BABY is more than the entire market cap of the company. Wrong once again. Let’s rid ourselves of the notion he is the next Warren Buffett, the emperor has no clothes,” Chukumba added.

While Cohen was making these power moves — for what it is worth — Buffett was spending billions to buy stakes in HP and Occidental Petroleum. And, the Oracle of Omaha dropped more than $11 billion on insurance company Alleghany.

Brian Sozzi is an editor-at-large and anchor at Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn.

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