Jake Freeman is an applied math and economics major at the University of Southern California. At age 16, He co-published a paper titled “Irreducible Risks of Hedging a Bond With a Default Swap.” at the age of 16. And now, at 20 years old, he is a multimillionaire and the head of Freeman Capital Management.
In July, Freeman bought more than 5 million Bed Bath & Beyond shares at just under $5.50 a share. After the investment, he owned approximately 6% of the home goods retail company.
When the stock price skyrocketed to more than $27 a share this week, Freeman sold his shares, earning more than $130 million for an estimated profit of around $110 million.
BBBY was considered a meme stock that gained popularity through social media. Social media communities can significantly influence the prices of shares, sometimes resulting in the stocks becoming overvalued.
“I certainly did not expect such a vicious rally upwards,” Freeman told the Financial Times. “I thought this was going to be a six-months-plus play,” he continued, adding that he was “really shocked that it went up so fast.”
It’s significant to note that even before this windfall, Freeman was not a typical college student. The initial investment in BBBY cost him $25 million, which he received from family members and friends.
After buying the stock, Freeman sent a letter to the company’s board of directors. According to the New York Post, he warned the company that it needed to “cut its cash-burn rate, drastically improve its capital structure, and raise cash.”
An earnings report released by the company in late June showed that its revenue and income numbers for the previous quarter dropped considerably, leading to the removal of CEO Mark Tritton.
On Thursday, Bed Bath & Beyond’s stock tumbled from $23.08 to $18.55 a share after Ryan Cohen, the co-founder of Chewy, confirmed that he no longer owns any shares or options related to BBBY stock.
In a Reddit post announcing that he no longer owned Bed Bath & Beyond stock, Freeman stated that he hoped the company could capitalize on the increased price and continue to operate for years to come.
“I certainly have some thoughts on how to best proceed at these prices which I would be willing to share if so asked,” he wrote in the post on the BBBY subreddit, which he titled “An Ode to BBBY.
“I am truly going to miss being able to say, ‘I am the second largest non-institutional shareholder of Bed Bath & Beyond,'” he added, “but I am certainly going to be shopping at BBBY tomorrow.”