New Bed Bath & Beyond under fire again from activist hedge fund

MIDVALE, Utah – The founder of JAT Capital fired off a no-holds-barred letter to the Beyond Inc. board of directors late last week.

Described by CNBC as “scathing,” the letter from  John Thaler accuses the board of regarding the hedge fund’s preferred CEO candidate with suspicion, mischaracterizing the exit of former CEO Jonathan Johnson and engaging in “poor behavior.”

Among other things, Thaler asked why Johnson’s ouster – which the fund had been pressing for – wasn’t described as a firing.

“Rather than terminating Johnson and publicly saying so (a statement that would have been well-received by everyone involved), the board decided to craft a press release along with Jonathan suggesting that he had stepped down and even making the ludicrous statement that he and the Board had jointly concluded that ‘now was the ideal time’ for a leadership transition,” he wrote in the letter, a copy of which was published CNBC.

In the Nov. 17 letter, Thaler reiterated its support for Marcus Lemonis to be appointed as the next CEO. Lemonis, who joined the board last month, is the CEO of Camping World and was star of the erstwhile CNBC business makeover show “The Profit.”

“There is no question that Marcus is the most qualified and experienced individual on the board or involved with this company in any capacity. It is a virtual certainty that the CEO search will not result in a candidate with Marcus’ resume or skillset,” Thaler wrote.

In a further plot twist, CNBC said Lemonis recently told the news organization he is not interested in becoming CEO. Instead, it reported, he expected to be named executive chairman when he joined the board.

Thaler also takes issue with the company removing ex-CEO Johnson’s seat from the board rather than filling it with another appointee. And he criticized the board for cancelling previously scheduled investor conferences.

“Investor conferences are a critically important investor relations activity to convey the company message, manage expectations and broad the investor base. Deciding not to do so is destructive to shareholder value. Deciding not to so because you are unwilling to answer basic questions about board behavior is highly suspicious and gives rise to the precision of inside dealing and self-preservation.”

JAT Capital Management owns a 9.6% stake in Beyond Inc. Thaler told CNBC the fund is not interested in acquiring the company.

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