By
Bhushan Akolkar
June 30th, 2023
A 20-year-old USC undergraduate realized massive profit after trading Bed Bath & Beyond stock the month after his initial buy-in.
A university student, Jake Freeman, recently amassed a $110 million windfall profit from trading Bed Bath & Beyond stocks. The twenty-year-old applied mathematics and economics major at the University of Southern California, achieved this by selling his stake in the struggling retailer after its stock price surged. Bed Bath & Beyond’s share price has hit a sustained rally in the month of August, reminiscent of 2021’s meme stock-mania.
Prior to this astounding development, Freeman purchased close to 5 million of the retail company’s shares back in July. The undergraduate notably bought into Bed Bath & Beyond when it was going through some challenging times. The company experienced an abysmal 25% drop in sales and went through the aftermath of former CEO Mark Tritton’s termination.
Insight into Freeman’s Initial Acquisition & Subsequent Trading of Bed Bath & Beyond Stocks
According to regulatory filings, Freeman acquired his Bed Bath & Beyond stake at under $5.50 a share. However, on Tuesday, the prominent retail chain saw its shares trading at more than $27 a pop. Amid the company stock’s newfound meme status, Freeman sold more than $130 million worth of stock from two brokerage accounts he owns. Speaking on the boom, the USC undergraduate admits that he “certainly did not expect such a vicious rally upwards”. In addition, Freeman also said that when he bought into Bed Bath & Beyond in July, he did so with the intent of playing the waiting game. Freeman explained:
“I thought this was going to be a six-months-plus play . . . I was really shocked that it went up so fast.”
Freeman’s initial cash outlay to procure the approximately 5 million Bed Bath & Beyond shares (6% of the company), was a relatively tame $25 million. According to him, he mostly raised the funds from family and friends. However, reports also suggest that the student has some substantial investing experience, investing for years alongside his uncle Dr Scott Freeman. Jake also joined his uncle, a former pharmaceutical executive, to build an activist stake in a publicly traded pharmaceutical company.
Jake Freeman also has experience in hedge funds after interning for a sustained period at a New Jersey-based hedge fund, Volaris Capital.
Despite Sustained August Rally, Company Stock Hit A Snag
Since its bleak June 29th earnings report, Bed Bath & Beyond stock has now surged five times in value. A favorable combination of factors has fueled this marked upswing. These factors include growing interest from retail investors in small free float stocks as well as several short sellers looking to offload stock.
However, despite its blazing run, Bed Bath stocks slipped up in premarket trading on Thursday. This happened shortly after activist investor Ryan Cohen announced his intent to sell his entire stake in the retailer through his firm RC Ventures. According to a filing with US regulators, RC Ventures plans to offload 9.45 Bed Bath million shares.