How Did 20-Year-Old Student Made $110 Mln In a Month?
A 20-year-old US university student has earned $110m from $Bed Bath & Beyond(BBBY)$ .
Let's look at how he made it:
1. A Legendary Bet On BBBY
In July, Jake Freeman raised the $25m from friends and family and bought 5m shares in BBBY at less than $5.50 a share. His uncle helped him establish the Freeman Capital Management fund (FCM), which he used to invest in $Bed Bath & Beyond(BBBY)$ .
It’s said that Freeman sold all his shares at around $28 and earned $110m. He almost sold his share at a high level compared to the current price of $18.55.
Photo from google
Freeman was also “shocked” at the speed of the surge in the stock. He said:
I certainly did not expect such a vicious rally upwards.I thought this was going to be a six-months-plus play…I was really shocked that it went up so fast.
2. A Newbie or A Veteran?
Freeman studied mathematics and economics at the University of Southern California.
In addition to the professional knowledge,Freeman had a lot of experience in the stock market.
He said he worked in the financial industry since 14 years old and have been interested in finance since I was 12.
He also has interned at New Jersey hedge fund Volaris Capital.
Compared to most of investors, I believe Freeman is a veteran with rich exprience in finance, hedge fund and investing.
3. A Young Activist Shareholder?
Last month, Freeman wrote to company’s board warning that
the retailer was facing an existential crisis for its survival.
To effectuate its survival, BBBY needs to cut its cash-burn rate, drastically improve its capital structure and raise cash.
Photo from google
At the same time, he called on retail investors to give BBBY a chance.
He wrote on his Reddit page:
Hi Everyone, I’m Jake Freeman.I truly think FCM’s proposed plan likely provides a great opportunity for BBBY to succeed. It provides‘buy-buy-time’...
Photo from Reddit
Like many impressive professionals, Freeman is young and also an activist.
After his investing, he began to push the management to improve the company and call on more investors to have faith in $Bed Bath & Beyond(BBBY)$. Similar stories also happend to $Occidental(OXY)$ as Carl Icahn kept questioning management.
Bottom Line
Jake Freeman’s surreal investing story comes both from his intelligence and good luck. As the saying goes, Opportunity comes to the prepared mind.
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It is so heart warming to hear success stories like Jake who made a cool 110 million in such a short space of time on Bed Bath & Beyond. But for every success story like Jake, there are also heart breaking stories too. The balloon has just popped for$Bed Bath & Beyond(BBBY)$ and its share price dropped 40% in the space of just 1 day. Jake is so lucky to have sold before this happens.
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