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Blood, Bath & Bankrupt? Fintwits Learn One of Life’s Lessons

This week witnessed a series of events that defines the meme stock skullduggery. The centerpiece of this tale is Bed, Bath and Beyond (BBBY) — aka Blood, Bath and Bankrupt — a plaything of Reddit meme stonks, river boat gamblers and dubious self-proclaimed activist shareholders.

Such an “activist” is one Ryan Cohen (aka RC Ventures), a tribe member involved in other meme stocks, such as GameStop. Cohen disclosed a 12.9% stake in GameStop, making him the company’s biggest individual investor. According to these filings, Cohen’s firm, RC Ventures, has expressed willingness to get more involved with the company in order “to produce the best results for all shareholders.” As such, when this “meme lord” pied piper files a securities action, the meme gamblers follow in droves.

On Tuesday, August 16, following days of gradual but persistent short squeezes similar to what happened in January 2021, BBBY exploded higher as retail meme traders piled into the stock, encouraged by news that Ryan Cohen placed another bet and a 10% stake on the struggling retailer.

According to Vanda research, retail traders poured a torrent of cash into Bed Bath & Beyond’s shares in recent weeks, even with the company’s financial situation collapsing. They bought $58.2 million of the stock on Wednesday, a day after snapping up a record $73.2 million. Net purchases over three weeks totaled $229.1 million.

As the above chart illustrates, BBBY bonds were signaling something was seriously wrong, yet the meme cowboys (aka Apes) drove the stock up to $30. The stonk traded one billion shares during the week.

Within two days, Cohen dumped the pump, pocketing a $68-million profit in the process. The stock in the subsequent rug-pull tumbled to $10 at the close Friday.

 

But the Last Standers continue living in their magical world.

Then, after the close Friday and following the news that Cohen had flipped all his shares (and sold all his calls), Bed Bath & Beyond was battered by more bad news after Bloomberg reported that some suppliers are restricting or halting shipments altogether after the home-goods retailer fell behind on payments, according to people familiar with the matter.

The retailer has previously said it’s struggling with cash and inventory optimization, and ordering missteps appear to have left it with a glut of goods that will have to be sold at markdowns.

Several of the firms that provide credit insurance or short-term financing to vendors have revoked coverage of Bed Bath & Beyond, drastically complicating the company’s scramble for liquidity.

Hat tip to Zero Hedge for timely and persistent reporting on the skullduggery. Another characteristic of this tawdry tale was the denial and magical thinking of the fintwit apes and especially their disbelief even as other mainstream financial media finally started breaking the story after the close on Friday. In Zero Hedge’s twitter feed were numerous tweets like this:

The Fintwits Apes ride Blood, Bath and Bankrupt

But to be clear, some big institutions (not just wild retail) with fiduciary responsibility were playing this meme.

Among the apes was a 20-year-old student, one Jake Freeman, who gambled a stake secured from his wealthy family to parlay into a five-plus bagger during the insanity ramp phase. Really?

Former SEC (aka Suck Elon’s Cock) chair Harvey Pitt discusses whether an investigation into fraud and market manipulation is coming. He says yes, but we will see if this fades into the sunset with loot pocketed.

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5 Comments on Blood, Bath & Bankrupt? Fintwits Learn One of Life’s Lessons

  1. Jake Freeman looks like an electronic creation, rather than an actual human being. His story is likely just as fake.

    Bloodbath and Beyond was the name of the gun store in an old Simpsons episode. Hopefully there is a branch in Ryan Cohens neighborhood.

  2. It’s such a joke. Bed Bath & Beyond is totally worthless. They have negative equity on their balance sheet, and keep losing money. That and Gamestop have been retarded- two companies with no chance to survive.

    • It’s such a joke.

      No, it’s not joke — it’s about trading, not investing, and betting that you will be the ‘lesser fool’.

      Along with being highly influenced, even dependent, on Fed policy, the market has been this way for quite a long time — the trading and speculation mentality, as opposed to diehard buy and hold, really accelerated when low cost internet trading came along — even Charles Schwab, which was never really cheap, meaning its pricing was always closer to full price brokers than discounters, now offers commission-free trading — link

      Churning and day-trading are closer to the norm now than many realize.

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