The latest blow in the “war on Wall Street”? The viral attention of the Reddit online community that sent GameStop into the stratosphere saw the actions of a struggling US retail chain take a roller coaster ride this week, earning $ 110 million to a 20-year-old student in the process.
It’s a frenzy that evokes memories of last year The stock meme saga that saw amateur online investors make hedge fund giants lose billions of dollars.
Meme stocks – stocks that grab attention among amateur investors via social media – became popular during the GameStop saga in early 2021.
Despite the company struggling in the post-pandemic landscape, shares of Bed Bath & Beyond have risen more than 250% in the past month before plummeting this week.
Attention was led by the Reddit WallStreetBets forum, with one commentator dubbing it “bloodbath and beyond”.
As shares of Bed Bath & Beyond (BBBY) have continued to rise over the past few days, many rumors on Reddit and other social media sites have urged other investors to keep buying.
Along the way, some enjoyed taking on professional investors who had bet that the stock of Bed Bath & Beyond would collapse.
Student, 20, earns $ 110 million before stock prices plummet days later
Jake Freeman, a graduate in applied mathematics and economics from the University of Southern California, told the Financial Times that he bought nearly five million shares of Bed Bath & Beyond (BBBY).
The company’s shares recently plummeted due to poor performance and the expulsion of its CEO.
Mr. Freeman bought his holding for less than $ 5.50 (£ 4.65) per share. On Tuesday of this week the stock had risen to over $ 27 (£ 22.81) per share amid huge online attention.
As the shares increased, he sold more than $ 130 million (£ 109.8 million) worth of shares, earning a profit of around $ 110 million (£ 92.8 million).
On Thursday, shares of Bed Bath & Beyond plunged more than 20% after famous meme stock investor Ryan Cohen revealed that he intended to sell his entire nearly 12% stake in the company.
Frenzy conjures up memories of the GameStop drama that cost Wall Street billions
Wall Street’s clash between amateurs and traditional investors was a key feature of last year’s GameStop drama, with many Reddit investors citing the aftermath of the 2008 financial meltdown as motivation to challenge the status quo.
The wild ride began in January 2021 when tThe struggling video game retailer has seen an unprecedented rise in its share price.
Amateur or retail investors, who communicate through social media, particularly on Reddit’s WallStreetBets community, have created a wave of interest in the company.
They thought the market was undervaluing the “brick and mortar” computer game store and mobilized around it, forcing the share price to rise with their purchases.
The company’s stock surged over 500% at one point, creating huge profits for some amateur investors who sold and devastating losses for professional hedge funds who had shorted the stock and remained exposed.
