Investment firm JAT Capital sent a scathing letter to the board of the new on Friday saying it has refused to answer questions from shareholders and is engaging in what the investment firm called unprecedented "poor behavior."
The firm, which has a 9.6% stake in the company and claims it is not an activist fund, excoriated the board for a series of misdeeds, including canceling planned investor conferences and twisting the facts about former .
"We have attempted to engage constructively with investor relations, senior management and the Board of Directors in recent months, making suggestions of best practices that might preserve and enhance value, and more recently pointing out actions taken by management and the board that appear to be destroying shareholder value," the letter, penned by JAT's founder John Thaler, states.
"We have taken the more active posture with Beyond because, quite frankly, I have never seen such poor behavior by a Board in my career. The things that I have heard, the things that have been spoken directly to me, and the actions I have witnessed are in a category that I have never seen."
Beyond was previously known as Overstock.com, which and rebranded. Prior to its rebrand, Beyond had been grappling with sluggish sales and a dwindling market cap. After its first quarter as the new Bed Bath, results were mixed with steep declines in sales and profits.
The company didn't return a request for comment.
Earlier this month, JAT called on Beyond to fire Johnson. Days later, the company announced he was stepping down.
In its letter, dated Friday, JAT questioned why Johnson's board seat was removed after his ouster and said it was an attempt to weaken "shareholders ability to have a say." The firm also accused the board of being disingenuous about and said bluntly that he'd been "fired."
"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," the missive reads.
"Now is the ideal time? In the middle of a company re‐branding effort, just as the company embarks on a $150 million marketing campaign? And that coincidentally coincides with shareholders calling for Johnson's removal? Writing a press release that twists the facts and makes disingenuous characterizations of the situation ... furthers the perception that the Board is engaged in self‐preservation and inside dealing."
Meanwhile JAT has called for Marcus Lemonis, the Camping World CEO and TV personality who starred in to take over management of the company. He last month and has to Beyond Inc.
JAT renewed those calls in Friday's letter and accused the board of being "suspicious" of Lemonis, pushing him to the sidelines and refusing his expertise.
"In one of the few instances where I have been able to engage with a member of the Board on the subject of why Marcus Lemonis wasn't being permitted to help manage the business, [chair of the board] Allison Abraham acknowledged to me that she (and others) were worried that 'Marcus has a secret nefarious plot,'" the letter states. "She has allegedly repeated this same concern to the interim CEO Dave Nielsen. When pressed on what that 'nefarious plot' might be, she acknowledges that she doesn't know."
Lemonis told CNBC he has no interest in being CEO of Beyond but did join the board with an expectation that'd he be appointed executive chairman, which is yet to happen more than a month into his tenure with the company. No clear timeline was set but other shareholders beyond JAT have been wondering what's ahead for the company's board given his appointment, Lemonis said.
He added he's "disappointed" relations between the board and investors have reached this low-point but agrees with JAT that change needs to happen.
"To be honest I'm kind of curious to some of the answers too," he said of the question's JAT posed.
As far as the "nefarious plot" he's suspected of, Thaler said he's been asked if he's a "trojan horse" for JAT or looking to buy Beyond, which he both denies.
"I enjoy working with businesses, it's been my brand for a long time," said Lemonis. "If I wanted to buy the business this wouldn't be the way I'd do it."
JAT called on Beyond's board to answer its questions, once and for all, and for everyone from vendors to sell-side analysts to demand more transparency.
"It is my strong desire that the Board be forced to explain what it is doing. This is not an unreasonable ask. The actions cited below which the Board has taken in the last 60 days appear to be to the detriment of the company and shareholders," the letter states. "This Board has refused to explain why they have made these decisions."
Read the full letter below:
