Cohen and Freeman made $180 million on BBBY stock before bankruptcy

  • Bed Bath & Beyond, the struggling home goods retailer, filed for bankruptcy on Sunday.
  • Ryan Cohen and Jake Freeman raked in about $180 million in profit on the same stock between them.
  • BBBY stock fell from a high of $30 last August to 30 cents at Friday’s close.

Ryan Cohen and Jake Freeman have been cemented as rare winners of the Bed bath and beyond saga. The meme-stock champion and college student took in around $180 million in combined profits from the homewares retailer’s shares in August – less than eight months before the company opened. bankruptcy filing on Sunday.

Cohen, Softis co-founder and GameStopPresident, invested about $121 million in BBBY in the first quarter of last year. It bought 9.8% of the home goods retailer, along with bullish call options on its shares.

The activist investor and stock pundit meme sold all stocks and options for $189 million in August, meaning he raised about $68 million in eight months.

Cohen bought BBBY at prices ranging from around $13 to $17, a The Securities and Exchange Commission filing shows. The stock soared as high as $30 in August, 100 times its closing price of 30 cents on Friday.

“My view of the business has clearly changed,” said Cohen, who pushed for changes within the company, said on last year’s disposals. He reported that BBBY was aggressively buying back shares and then flagging heavy losses as a major red flag.

Meanwhile, Jake Freeman paid around $25 million for a 6.2% stake in BBBY, which he first disclosed in late July. Student’s Freeman Capital Management sold its entire position less than a month later to over $130 million – close to BBBY’s total market capitalization as of Friday’s close.

Freeman, just 20 at the time, said he bought BBBY shares because they appeared to be priced in bankruptcy. While he saw this outcome as a real possibility if the company did not act, he believed that if it adjusted its capital structure, it could raise more cash and buy more time to save its business.

The maths and economics major also attributed his decision to take profits to the sharp rise in BBBY stock – it briefly quintupled during his holding period – and the fact that he was going back to school the next day.

Both Cohen and Freeman pegged the timing of their selloffs as BBBY stock plunged 99% from its August high. While their sales likely dashed hopes of a turnaround and contributed to the stock’s decline, BBBY’s bankruptcy suggests they came out at the right time.

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