College student makes $110M trading shares of Bed Bath & Beyond

jcgriff2

jcgriff2

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Since the pandemic, scores of novice daily traders have appeared online trying to rally stock prices for companies they think are worth it.

However, this type of activity reminds me of "pump and dump" tactics used by unscrupulous novice traders.

College student makes $110M trading shares of Bed Bath & Beyond

The SEC may be looking in.

John
 
From reading the article, this sounds like the same that happened with GameStop where on Reddit a group planned and bumped the stock price from struggling firms to 'protect' the firm against certain traders. I don't remember what kind of traders got upset from this action though, and, due to lack of understanding how investment works + not knowing the rules around trading in the US, I also don't understand what was illegal about the action with GameStop as I recall something illegal happening with that action.

If everything in the article is accurate, which I'm not completely sure about, this college student is just lucky with their timing.
 
That's out of the question for me, in my country I can't watch the CW.
 
Although I feel like the reporting on this one leaves out the fact he had a much larger amount of capital than the average college student.
 
axe0 said:
From reading the article, this sounds like the same that happened with GameStop where on Reddit a group planned and bumped the stock price from struggling firms to 'protect' the firm against certain traders. I don't remember what kind of traders got upset from this action though, and, due to lack of understanding how investment works + not knowing the rules around trading in the US, I also don't understand what was illegal about the action with GameStop as I recall something illegal happening with that action.

If everything in the article is accurate, which I'm not completely sure about, this college student is just lucky with their timing.
Click to expand...

You are correct about GameStop.

The problem with these 'schemes' - they span countries world wide and of course include people in countries who could care less about market regulations, insider trading, etc... and simply let people do whatever they want. So 100s or 1,000s+ get together and start buying a near-worthless stock, then start promoting it, investing more in it, etc...

Those in the conspiracy then select a sale price so now collectively a good-sized group owns 100k or even 1 MM shares - most bought at ~0.25 and after several weeks of hyping the stock on social media causing that $0.25/hare stock to now be worth over $100/share. 30-60 minutes before the stock exchange closes for the day, the conspirators begin to dump all shares. However, people are still buying (mostly late-comers catching up on SM posts) which offsets the massive selling and keeps the stock price artificially high through the market close.

Quite a few have now made huge profits and it won't be apparent until the opening bell the next morning at 9:30 that most have lost just about every cent invested.

"Pump 'n Dump".
 

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