At least one investor exited Bed Bath & Beyond before GameStop chairman Ryan Cohen.
Securities and Exchange Commission filings show Jake Freeman, a 20-year-old college student, made $110 million on meme-stock favorite Bed Bath & Beyond BBBY, +11.77%.
Freeman acquired a 6.2% stake in the home goods retailer in July — nearly 5 million shares, equivalent to about $25 million, or $5.50 per share.
On Tuesday, Freeman sold over $130 million worth of stock, filings show.
“I didn’t expect the price to go up that much,” Freeman told MarketWatch. “I expected BBBY to better structure its balance sheet to unlock value. I felt that BBBY wasn’t worth it from a risk/reward standpoint at these elevated values.”
Bed Bath & Beyond shares fell more than 18% in after-hours trading on Wednesday after Cohen announced his plans to sell his large stake in the company just months after his purchase.
He is a student at the University of Southern California and, according to initial reports by the Financial Times, raised the initial money from friends and family.
According to his LinkedIn profile, Freeman has practiced for New Jersey hedge fund Volaris Capital over the years. According to FT, Freeman and his uncle Dr. Scott Freeman, a former pharma exec, recently amassed an activist stake in pharmaceutical company Mind Medicine MNMD, +10.15%.
Freeman told MarketWatch he now plans to focus on having “constructive” dialogue with Mind Medicine’s board of directors alongside his studies in complex analysis and mathematical statistics at USC. He is now studying for the GRE in math.
After Freeman acquired Bed Bath & Beyond through Freeman Capital Management, a Wyoming-registered fund, in July, he sent a letter to management saying the company was “facing an existential crisis,” according to SEC filings for his survival”.
He advised the board to “lower its cash burn rate, drastically improve its capital structure and raise cash.” He suggests taking advantage of the stock’s implied volatility by swapping debt and then issuing a convertible bond.