College Student Walks Away With $110 Million After Latest Meme Stock Craze

A student at the University of Southern California reportedly earned $110 million on Tuesday by selling his shares in Bed Bath & Beyond at the height of a meme stock craze.

The stock price of Bed Bath & Beyond soared from $4.96 to $27.21 between July 18 and noon on August 16, reflecting a nearly 449% increase in less than a month as traders on social media coordinated to buy shares. Before the price began to decrease, Jake Freeman — an applied mathematics and economics major — dumped the entirety of his stake, netting $110 million.

“The significant appreciation of BBBY’s share price combined with the fact that I am leaving for school tomorrow played critical roles in closing the Position,” he wrote on Reddit.

Freeman purchased 5 million shares at $5.50 each last month using $25 million he raised from friends and family, according to Fortune, earning himself a 6.2% passive stake in the company. He made the purchase after a dismal first-quarter report showing the home goods retailer’s sales had plunged 25%, even as the company maintained $3.3 billion in debt and a mere $107 million in cash on its balance sheet.

“I feel that my acquisition of the Position was a watershed moment for BBBY, and I hope that in one form or another BBBY is able to capitalize off of this increased price to realign their balance sheet and operate for decades to come,” he added on Reddit. “I am truly going to miss being able to say ‘I am the second largest non-institutional shareholder of Bed Bath & Beyond,’ but I am certainly going to be shopping at BBBY tomorrow.”

Freeman celebrated his successful investment by going out to eat with his parents in the New York City suburb where they live. “I certainly did not expect such a vicious rally upwards,” Freeman said in an interview with Financial Times. “I thought this was going to be a six-months-plus play … I was really shocked that it went up so fast.”

While Freeman emerged victorious from the Bed Bath & Beyond fiasco, many institutional investors endured heavy paper losses. Investors with short positions lost $662 million on paper over the past month, including a $218 million hit on Tuesday, data analytics firm S3 Partners told Bloomberg. Short sellers effectively bet against companies by borrowing shares, selling them on the stock market, and buying back the shares at a later date to return to the original owners — a strategy that results in a profit if the stock price declines.

The surge in Bed Bath & Beyond stock occurs over a year after traders coordinating their efforts online agreed to purchase stock in GameStop and AMC, as well as cryptocurrencies such as Dogecoin. Investors shorting GameStop marked losses of over $70 billion, with hedge fund Melvin Capital losing 53% of its value in the wake of the meme trading surge.

Celebrity business magnates, including Barstool Sports founder Dave Portnoy and Dallas Mavericks owner Mark Cuban, publicly lauded the meme trading. SpaceX and Tesla CEO Elon Musk likewise told traders to give “no respect” to “shorty apologists.”

“Old days where a hedge fund manager could quietly short a stock, then publish negative research and take a bullhorn to it in the media are over,” Canadian entrepreneur Kevin O’Leary said of the trend last year. “They now run the risk that the power of the crowd will turn on them and squeeze their heads like a teenage pimple.”