Buckle up, Nordstrom shareholders. Volatile trading is ahead. Activist investor Ryan Cohen is building a stake in the department store chain as he looks to shake up its board, people familiar with the matter told CNBC. Cohen’s interest in the company was first reported by The Wall Street Journal . Not surprisingly, Cohen’s entry has ignited a rally in Nordstrom shares, which have spiked as high as $27.15 in trading Friday on the news. Recently, shares were up more than 20% “In our view, Nordstrom’s performance over the last decade begs for an activist role as it has continued to show inconsistent performance, and more recently underperformed department store peers despite an arguably better brand and loyal customer base,” wrote Dylan Carden, an analyst at William Blair in a research note late Thursday. Still, it would be wise to question whether Cohen is the right investor for the job. The Chewy founder is taking aim at ousting former Bed Bath & Beyond CEO Mark Tritton from the board’s compensation committee. Tritton had once worked at Nordstrom, and Cohen thinks this makes him “conflicted and unqualified” to serve, the Journal report said. This isn’t the first time Cohen has had Tritton in his crosshairs. Cohen briefly built up a stake in Bed, Bath & Beyond in March. A few months, later Tritton was out of a job and Cohen reaped big gains as he sold off his stake . The home goods retailer didn’t fare as well. It’s missed debt payments and is expected to soon file for bankruptcy protection. JWN 1D mountain Nordstrom shares surged after a report says Ryan Cohen is building a stake in the department store chain. While not as dire, Nordstrom has troubles of its own. Sales for fiscal 2022 are expected to remain below fiscal 2019 levels, after a weak holiday season. ‘Begs for an activist’ The department store business hasn’t been an easy one as shoppers buy more goods online or look to avoid large malls. To Nordstrom’s credit, it has tried to respond by diversifying, but its record of success has been spotty. Nordstrom caters to a high-income consumer, which should help insulate it from economic weakness and the pinched budgets brought on by the recent surge of inflation. But its performance hasn’t reflected that. Instead, it’s been plagued by inventory issues at its off-price Rack business, which had been for a time a bright spot in its portfolio. Rack’s poor performance is even more troubling when one considers the success other comparable retailers like TJX Cos. has seen. Nordstrom has suffered from a distracted management and costly bets on new ventures, Carden said. He cited three examples: Trunk Club , a subscription clothing business that was written down to zero; Local, an attempt to reach consumers outside of the shopping mall, for which the company has shared few performance metrics; and its “sprawling” New York City flagship . Ahead of the Cohen news, analysts had an average rating of hold on the stock with a target price of $18.12, according to FactSet. Judging by other stocks that Cohen has been involved with, including GameStop , where he serves as chairman, shareholders should expect a wild ride ahead. For its own part, Nordstrom has indicated it will listen to what Cohen has to say. “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,” the company said in a statement. “We will continue to take actions that we believe are in the best interests of the company and our shareholders.” ‘Ripe for a squeeze’ The biggest obstacle Cohen will face is the Nordstrom family’s 30% stake. People familiar with the matter told CNBC Cohen has met with family members, but the timing of the those conversations is unclear. Erik Nordstrom has been the sole CEO of the department store since March 2020. Prior to that change, the management structure was shared between Erik Nordstrom, his brother Pete Nordstrom and the late Blake Nordstrom, who died of lymphoma in 2019. They had all shared the title of co-presidents and served as directors. Pete Nordstrom is still involved with the business and holds the title of president and chief brand officer. Don Bilson, an analyst at Gordon Haskett, said Cohen’s actions seem personal — and serious. Cohen has amassed a meaningful stake, recruited two unnamed executives who could join the board and flown to Seattle to meet with family members, he said. JWN 5Y mountain Like many department store chains, Nordstrom’s stock has struggled in recent years as shoppers shifted more of their purchases online and skipped the mall. The analyst also recalled that El Puerto de Liverpool, a Mexico City-based department store operator, holds a 10% stake in Nordstrom. “Before Cohen and his Meme Army showed up, we were thinking Liverpool was the interesting wildcard that folks should keep an eye on,” Bilson wrote in a research note Friday. All of this means, the threat of a short squeeze is high. Consider this math: According to Bilson, 22 million shares are sold short. There are 160 million shares outstanding, but some of that is in the hands of the family, Liverpool, and now, Cohen. This means the effective float is closer to 70 million, he said. “Conditions are ripe for a squeeze, especially when you consider that Cohen’s meme-stock army doesn’t mess around when they smell blood and couldn’t care less about fundamentals,” Bilson said. “Don’t think for a second that this didn’t figure into Cohen’s calculations.” Bilson said a key date for the calendar is Feb. 17, which is the deadline for nominating a board member. If an agreement is struck between Cohen and the company, it will like need to occur before then. Otherwise, the next key date would be sometime around April 7, which is when Nordstrom’s proxy statement typically comes out. —CNBC’s Gabrielle Fonrouge and Michael Bloom contributed to this report.