In a Surprising Move, Jonathan Johnson has Stepped Down as CEO and Board Member of Beyond, the Formerly Named Overstock.com

Monday should have been a banner day for Jonathan Johnson, 6 November 2023 to be specific.

In under five months (in his role as CEO of Midvale, Utah-based Overstock.com), Johnson had engineered

• The early June acquisition of the digital assets and intellectual property of Bed Bath & Beyond out of bankruptcy for a mere $21.5 million (as covered in this late June writeup and analysis titled "ANALYSIS: Overstock's $21.5 Million Bet Drives a 22% Pop in its Stock Valuation - In Under 24 Hours");
• Expanded Overstock into a broader product mix, one in-line with the historical Bed Bath & Beyond Product Market Fit for its consumers;
• Rebranded Overstock as Bed Bath & Beyond; and
• Orchestrated Bed Bath & Beyond's formal transition to move to the New York Stock Exchange from the Nasdaq Stock Market, with its shares trading under the new stock symbol of BYON,

the last of which occurred early Monday morning, just two days ago.

However, Monday was also the day that Beyond announced that Johnson was leaving the company immediately, both as its CEO and as a board member.

The only reason provided in the release for Johnson's departure was this:

"Mr. Johnson’s departure follows mutual agreement by the Board and Mr. Johnson to transition the company to new leadership."

The response to this news by several leading finance and business outlets was, clearly, a bit more telling:

• CNBC: "The new Bed Bath & Beyond’s CEO is out, days after activist firm called for his ouster;"
• Reuters: "Online retailer Beyond Inc's chief steps down amid activist investor pressure;"
• Barron's: "Bed Bath & Beyond CEO Steps Down on Day Overstock Changes Name to Beyond;" and
• Axios: Bed Bath & Beyond CEO steps down after Overstock transition."

And these are just a few of the less than flattering media reports on this topic.

Of these, I found the CNBC and Reuters writeups to be the most informative, with both referring to JAT Capital Management as the driving force behind Johnson's ouster from Beyond.

JAT is an independent, SEC-registered alternative investment management firm based in Greenwich, Connecticut with over $900 million in assets under management (AUM).

Of late, JAT has grown its ownership stake of Beyond to 9.6%.

And one week ago JAT filed with the U.S. Securities and Exchange Commission a copy of a damning letter JAT had sent to the Beyond/Overstock Board of Directors on Thursday, November 2 calling on the Board to make dramatic changes at the company, including

1. Changing the CEO immediately,
2. Establishing a stock option pool to incentivize and recruit new executive talent, and
3. Selecting Board Member Marcus Lemonis as the new CEO,
   among other recommendations.

As evidenced by Monday's announcement, the Beyond Board moved quickly, at least in regards to replacing Johnson.

However, in keeping with the "mutual decision" for this transition, Beyond's Chair, Allison Abraham, offered the following praise of Johnson:

“Jonathan has been integral to the company’s successful evolution over more than two decades of service. We thank him for his leadership, foresight and immense contributions that helped build the company into the leading online furniture and home furnishings retailer that it is today and is now poised to capture greater opportunities in the future.”

And comparably, Johnson had this to say in the release about his time with Overstock/Beyond:

“I am incredibly proud of all that we have achieved to transform the company since becoming CEO – evolving to a leading online home retailer with an iconic name and a large, growing consumer base. As the company turns the page to become Beyond, now is the right time for me to also turn the page to the next chapter in my career. It has been an honor to work with such an exceptional team. I am confident the company is well-positioned to achieve broader popular reach as a bigger and better Beyond.”

Johnson had served in a variety of executive positions with Overstock.com/Beyond for over 21 years, most recently as CEO for over four years, as well as serving as a member of its Board for more than 10 years.

A graduate of the Brigham Young University School of Law, Johnson had previously served as General Counsel and Chief Financial Officer of TenFold, in addition to serving as a Board Member/Advisor for over 10 different corporations and organizations during his career.

Beyond Names David Nielsen as Interim CEO & President

The company announced in the news release it has named fellow BYU alumnus, David Nielsen, as Beyond's Interim CEO and President.

According to the company announcement (and his LinkedIn Profile), Nielsen has been with Overstock / Beyond for over 11 years in total, most recently as its President, a position he has held since 2019.

Additionally, Nielsen had previously served for over 11 years in executive and management positions with Payless ShoeSource.

In the meantime, and as expected, "The Board has initiated a comprehensive internal and external search process to identify a permanent Chief Executive Officer."

So ... what's next for Beyond, is yet to be seen.

As Yahoo! Finance reports, Beyond's 12-month trailing revenue is still a healthy $1.6 billion, although its revenue dropped over 15% in the most recent quarter and the company is not profitable today.

Additionally, the market valuation of Beyond has been halved to the $700 million range since 30 June 2023, down from a recent high of nearly $1.5 billion.

{NOTE: That recent valuation high can be tied directly to the news that Overstock.com was going to purchase the digital assets of Bed Bath & Beyond out of bankruptcy.}

Nevertheless, this is clearly a time of transition for Beyond, and obviously for Johnson, as well.

What will happen with either is yet to be known.

But one thing is certain: I will be watching.

AUTHOR'S NOTE: Today's writeup falls directly in line with our commitment at Utah Money Watch to analyze and report-on the most important and impactful financial/monetary happenings in the state of Utah, especially news and information not reported on or that did not provide critical insights to the story behind the story and beyond the regurgitation of company press releases. DLP

* — For individuals interested in reading the full copy of the letter sent to the Beyond Board of Directors by JAT Capital Management, a copy is attached below.