Ryan Cohen becomes a figure of the movement in Bed Bath & Beyond (NASDAQ: BBBY) shares, first announcing a 9.8% stake in the retailer. New filings later revealed that Cohen owned an 11.8 percent stake in Bed Bath, which included stock and options.
On Thursday, it was revealed that Cohen had sold his entire position in the struggling retailer. Cohen’s profit from his stake in the retailer was $68.1 million over a seven- to eight-month period.
Compare this with Jake Freeman, the 20-year-old college student who reportedly amassed $100 million in less than two months trading shares of Bed Bath & Beyond. Freeman bought 4.69 million shares of the retailer in July at a price of about $5.20 a share, along with his uncle, Dr. Scott Freeman.
That gave their family fund, Freeman Capital Management, a 6.21% passive stake in the meme stock.
“I wasn’t aware it was a meme,” the USC student told Benzinga on Thursday.
“I approached it more from a mathematical side – looking at the balance sheet and the intersection of the debt side, the equity side. By no means did I expect the stock to go up so quickly.”
The Bed Bath & Beyond Investor Plan: On July 21 letter to Bed Bath & Beyondthe younger Freeman outlined Freeman Capital’s plan to restructure the retailer, which consists of two key steps: reducing debt and raising capital.
Fast forward just four weeks later, coupled with a carefully orchestrated short squeeze by Reddit’s WallStreetBets community known as the “Monkeys,” Bed Bath shares soared to a high of $28.60 on Tuesday — the same day Freeman Capital exited from his entire share in the company.
It is curious that on the same day Cohen, who currently serves as GameStop Corp. (NYSE: GME) Chairman and originally sparked Bed Bath & Beyond’s fanfare with Apes, filed with the SEC saying it intends to sell up to 9.45 million shares of the company from that day.
The Freeman Family Fund sale was timely. It closed at more than $130 million after spending $25 million in initial investment, netting about $105-$110 million, or between 420%-460%.
MindMed shares Skyrocket: Jake, who was previously an intern at Volaris Capital Management, invested with his uncle Scott, who is the co-founder and former chief medical officer of Mind Medicine (MindMed) Inc (NASDAQ: MNMD). Shares of MindMed jumped 77.4% from the previous day’s highs on Thursday after the announcement of the sale to Bed Bath & Beyond.
Investors’ focus is now on MindMed, which was originally a private company, Savant, co-founded by Scott.
The Freemans acquired a 5.6% stake in the company and sent a strategic plan to increase value to MindMed, outlining the fund’s interest in working hand-in-hand to shorten the development time for MindMed’s two original drugs and reduce the annual cash burn rate.
Analyzing the letter, which the younger Freeman confirmed to Benzinga, FCM is focusing on MindMed’s core drugs, reducing cash burn and ending MindMed’s cash equity offering.
“I’ve been in drug development since I was in high school,” Scott said in an Aug. 16 interview on the Psychedelic Invest YouTube channel.
“About 13 years ago I partnered with Stephen Hirst and we started a company called Savant. It was a private company working on drugs to treat addiction.
After MindMed bought Savant, where he was previously CMO, Scott became the company’s first CMO. He left the organization about a year after his arrival, making him the first senior member of the team to do so.
Benzinga asked the younger Freeman why Scott was leaving the company; he said he could not disclose the reason for Freeman’s departure because of a nondisclosure agreement.
“As a co-founder,” Scott said in the aforementioned interview. “I’ve been sitting on the sidelines and watching and one of the reasons I want to come back is because I think there are things that I think should be done differently.”
In the letter to MindMed, the two call for an overhaul of the company, including layoffs of 11 of 22 employees; the elimination of more than $21.8 million in non-core costs; and half the cash burn rate over time.
He is also calling for the immediate development of a proposal to appeal to the FDA to upgrade his drug MM-120 from a phase 2 to a phase 3 trial, which Freemans said could bring the drug to market in four years, rather than the expected seven to eight years.
The improvement plan also calls for a 50% reduction in executive compensation.
BBBY, MNMD Price Action: Shares of Bed Bath & Beyond fell 40.54% to $11.03 at the close on Friday. Shares fell an additional 12.15% to $9.69 in the after-hours session on Friday. Shares of MindMed traded down 16.92% near $0.85 on Friday and traded up 4.44% in after-hours trading at $0.89.
Photo via Shutterstock.
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