Last Updated: August 21, 2022, 13:12 IST
Meme stocks are gaining popularity with the rising usage of the internet. One such stock has earned a 20-year-old college student $110 million who sold his stake in home goods retailer Bed Bath and Beyond, a meme stock. The American company’s share price rose during the summer. A meme stock is a stock that gains popularity through social media.
The big profit by the college student, Jake Freeman, was made possible as he sold his shares before billionaire investor Ryan Cohen exited the struggling home goods retailer following a stunning rally in the meme stock this month. Freeman studies applied mathematics and economics at the University of Southern California.
The boy had bought 5 million shares in Bed Bath & Beyond at $5.50 a share in July. He spent a total of $25 million on the investment with the help of his wealthy uncle, according to a report by the Daily Mail. He sold the stock on August 16, when its price rose to $27 a share.
Freeman had a 6 per cent stake in the company, which saw a surge in value thanks to the ‘meme stock’ boom, which gained popularity through social media. According to a Financial Times report, the 20-year-old college student sold stock worth more than $130 million using his TD Ameritrade and Interactive Brokers accounts.
Following his selling on August 16, the stock declined 16 per cent on August 17 after reports that the big billionaire investor Ryan Cohen might sell his stake in the struggling company. By August 18, its shares tumbled 35 per cent as Ryan Cohen sold his stake in Bed Bath & Beyond.
“I certainly did not expect such a vicious rally upwards… I thought this was going to be a six-months-plus play…I was really shocked that it went up so fast,” Freeman has told The Financial Times.