University student pockets £92m after selling his shares in ‘meme stock’ US homeware retailer
A university student has pocketed £92million after selling his stake in a US firm that was caught up in a month of frenzied trading similar to last year’s boom in so-called ‘meme stocks’.
Jake Freeman, a mathematics and economics student at the University of Southern California, bought around 5m shares in American homeware retailer Bed, Bath & Beyond in July after its value plummeted after a dismal set of results and the ousting of its chief executive.
He paid just under $5.50 per share, costing around £21million, which Freeman, 20, said he raised mostly from friends and family.
Hot profit: Jake Freeman, a 20-year-old mathematics and economics student, bought 5m shares in American homeware retailer Bed, Bath & Beyond in July
But earlier this week shares in Bed, Bath & Beyond soared to $27 each, taking the value of Freeman’s holding to £112million, most of which he quickly sold.
He told the Financial Times that he was ‘really shocked that it went up so fast’.
The sale was well-timed as the stock then dropped back sharply to around $18 after one of the retailer’s major shareholders, activist investor Ryan Cohen, said he was planning to ditch his entire 12 per cent stake in the firm.
It was among the meme stocks that attracted attention last year from retail investors, many of whom frequent internet forums, who attempted to engineer a ‘short squeeze’, driving the share price of a company higher to force short sellers to sell their positions, thereby forcing the price even higher.
Other firms targeted included computer game retailer GameStop.