Why Jim Cramer Is Watching Ford and Bed Bath & Beyond Tuesday

Its the return of the meme stock, this time relating to Bed, Bath & Beyond.

A 20-year-old US student has made a $110 million (£91m) profit after betting on the Bed, Bath & Beyond stock for one month.

The student, Jake Freeman, and his family bought 5 million shares of the Bed, Bath & Beyond stock for approximately $5.50 (£4.58) in July for a total of about $25 million (£20.8m).

The low-earning stock is considered a meme stock, or one that struggles on it's own but is manipulated by investors through social media talk.

Reddit forums like r/wallstreetbets track meme stocks like Bed, Bath & Beyond, GameStop, and AMC and an increase in talk about one can cause the price of the stock to rise beyond its actual value.

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On Tuesday, Freeman sold shares for more than $130 million (£108m) after the price rose to $28 (£23).

By Thursday the price of Bed, Bath & Beyond (BBBY) dropped down to $17.43 (£14.53).

“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 … I was really shocked that it went up so fast.”

Freeman, a student at University of Southern California, was able to afford the initial $25 million thanks to friends and family. His uncle is Scott Freeman, a former pharmaceuticals executive.

When Freeman acquired BBBY in July, he wrote a letter to the board of directors saying Bed, Bath & Beyond was “facing an existential crisis for its survival" and suggested they “cut its cash-burn rate, drastically improve its capital structure, and raise cash" according to an SEC filing.

He also posted the Bed, Bath & Beyond Reddit forum asked people to 'give Bed, Bath & Beyond' a chance and noted he had has "worked in the financial industry since 14 years old".

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