20-year-old college student makes $110 million in 6 weeks trading US stocks

In August 2022, US stocks brought "meme stocks" back into the headlines. A home retailer that was losing money, had empty stores, and was burdened by debt saw its stock price skyrocketing from around $5 to over $27 in just a few weeks. The media subsequently uncovered a 20-year-old college student: Jake Freeman, an applied mathematics and economics major at the University of Southern California, who through funds raised from family and friends, bought nearly 5 million shares of BBBY at a price below $5.50 in July, holding approximately 6.2% of the shares at one point; he sold out around August 16, with proceeds exceeding $130 million and profits of about $110 million.
This story could easily be turned into an inspirational short video: a college student’s success, retail investors defeating Wall Street, and memes proving that anything is possible. The more accurate interpretation, however, is the opposite—
It does not prove that memes hold value, but rather proves that: within an extremely short window, attention can temporarily obscure fundamentals; yet only a few individuals managed to do three things simultaneously: choose the right structure, withstand volatility, and exit before the narrative broke down.
Freeman himself told the Financial Times that he initially expected the stock price to perhaps reach $8 to $9, planning to hold for at least over six months; the surge in price exceeded his expectations. He was not betting on "infinite increases," but rather wagering on a target priced as if it were on the brink of bankruptcy, believing there was still room for maneuver in the capital structure while riding the wave of retail sentiment and options squeezes.
Months later, the same company headed toward liquidation. On April 23, 2023, Bed Bath & Beyond filed for Chapter 11; the stock equity was canceled during the bankruptcy proceedings, coming close to zero for common shareholders. Overstock subsequently purchased the brand and e-commerce assets, but did not save the original shareholders.
So, the question this article seeks to answer is not "Can memes make one rich?" but three more specific inquiries: why do things lacking traditional value continue to tug at the market repeatedly; if one truly wants to invest a portion of funds in this way, what should new entrants look at first; and by using BBBY as a complete closed loop, how to separate choices from exits.
This is not the myth of a college student, but rather an accelerated capital structure trade.
Let’s return to the character's actual position. Freeman is not a campus trader who has just touched stocks for the first time. He started engaging with finance in his teens, conducted research on bonds and credit default swaps at the age of 16, interned at a hedge fund in New Jersey, and disclosed holdings in BBBY through his entity, Freeman Capital / FCM BBBY Holdings, in the summer of 2022. The funds mainly came from friends and family, amounting to around $25 million to $27 million—too large for the "college student" label, but simply high-risk concentrated capital for a transaction with a clear exit discipline.
On July 21, he sent a letter to the company's board. The crux was not "let's squeeze the shorts together," but: the implied volatility of BBBY options was extremely high and could be used to restructure debt—replacing high-interest unsecured debt with warrants and convertible bonds, while also issuing senior debt financing to lower the debt load and obtain cash. He judged that the company was priced by the market as a bankruptcy target; if the capital structure could be rewritten, the upside potential was greater than what was implied by the price at that time.
The price reaching above $20 was not solely a result of this letter but rather three forces coming together:
1. The stock was cheap enough, the retail end had a low single-stock threshold, and social platforms easily formed slogans.
2. A large number of bearish positions accumulated in the short and options markets; rising prices would force some shorts to cover, and market makers hedging for call options would further buy the underlying stock, creating a positive gamma feedback loop.
3. Symbols like Ryan Cohen appearing in the shareholding and options structure led the community to interpret BBBY as "the next GME."
Freeman sold almost all of his position on August 16. Subsequently, Cohen's disclosure of selling shares caused the sentiment to break, leading the stock price to quickly slide from around $30 to the teens and further down. He wrote "An Ode to BBBY" on Reddit, explaining his exit reason in detail: the speed of the rise was too rapid, and he needed to return to school the next day. This sounds casual, but in essence, it meant that with the liquidity window still open and the counterparty still willing to pay a high price, he chose to lock in certain profits.
Extending the timeline, the conclusion becomes more solid:

Meme markets reward those "who pass the chips to the next person near the peak of the narrative," rather than those "who prove this company should operate indefinitely."
Why is there still a market for things with no value
Here, "no value" refers to the value in traditional discounted cash flow models: stable free cash flows, verifiable moats, and repeatable profitability. At that time, BBBY's quarterly sales were plummeting, cash was tight, and debt was heavy; it did not retain its stock price at a high level based on its own operations. Its ability to rise was due to prices being determined by a different set of variables during a short window.
Memes can be understood as a form of attention-derived products. The targets could be a dying retailer, a dog wearing a hat, a slogan, or an address with smart money. The traders are not buying next year's earnings per share, but whether someone else is willing to express the same idea at a higher price in the coming days.
They can reappear due to five primary mechanisms that reinforce each other.
The first layer is the lottery structure. The human brain is overly sensitive to "low-probability huge returns." A stock priced at $5, or a coin with a market cap of millions, psychologically feels like a cheap lottery. Even if the expected value is negative, as long as the return distribution is extremely right-skewed, it will continue attracting new funds. The high PTV (Prospect Theory Value) assets often referred to in studies are those with high volatility, positive skewness, and good storytelling; they can attract retail investors in the short term and easily show overall return deviations in the medium term.
The second layer is social identity. Meme trading is not just trading; it is also about community. GME represents "retail retailing the shorts," BBBY represents "Cohen is still here, so the story isn't over," and crypto memes are about "we understand this meme." Rising prices will reinforce identity, and identity will prevent stop-loss—losing money is reinterpreted as "not enough faith."
The third layer is the market microstructure. Low liquidity + high short or high options exposure means a small buy can significantly move the price; when the price moves, the shorts and market makers' hedge orders turn into additional buy orders. This is not an improvement in fundamentals, but positions being forced to close. BBBY's dramatic rise depended heavily on this layer. Crypto markets are similar: when the pool is shallow, a few market orders can create "thousand-times" K-lines.
The fourth layer is that the supply of attention is perpetually excessive. Mobile phones, commission-free brokers, and the near-zero cost of on-chain issuance make the "production" of new memes exceedingly cheap. As long as there’s a lack of sufficient high-quality production assets during the cycle, speculative capital will need to seek outlets. This is especially evident in crypto: as targets with clear business models decrease, funds will rush to assets decoupled from fundamentals because the FOMO brought by bull markets must fall somewhere.
The fifth layer is survivor bias. People remember Freeman’s $110 million or a certain address turning $1,000 into $100,000; they easily forget the thousands of accounts buried in the same narrative during the same week, as well as the eventual cancellation of BBBY equity. The media structure itself fuels the meme—extreme profitability is newsworthy, but silent losses are not.
Thus, the reason memes "always have a market" is not because the pricing models acknowledge them, but because: human demand for narratives, conformity, and right-skewed returns has not disappeared, while modern trading infrastructure has reduced the friction of this demand to nearly zero.
They can price attention but cannot price companies in the long term. Once the window closes, debt, dilution, unlocking, liquidity withdrawal, and bankruptcy proceedings will pull the prices back down.
If you only want to put a portion of your money into this realm, first change three default settings
"Putting a portion of funds" is the only reasonable premise. The proper categorization for this portion of funds is: speculative budget that can go to zero, not core asset allocation, and certainly not living expenses post-leverage.
Before entering the market, first change three default settings.
First, shift the goal from "catch the next hundred times" to "in an extremely poor probability game, only participate in the rare occasions where the structure has not deteriorated." Hundreds of times are the tail of a posterior distribution, not a preemptive strategy.
Second, change the position unit from "this one looks likely to rise" to "if this one loses badly, will it hinder my ability to act on other opportunities?" Individual memes should only occupy a small fraction of the speculative budget, rather than a small percentage of net assets—there's an order of magnitude difference between the two.
Third, write your exit plan before you make the purchase. Meme profits come from others' sentiments, not from your patience. Holding without an exit rule merely binds liquidity risk to faith.
Freeman's transaction can be abstracted into a checklist, rather than mimicked as "even college students can go all in."
What he did right: the target still had public financials and an options market where he could calculate the shorts and volatility; the purchase occurred after the price had been regarded as a bankruptcy pricing, not on the loudest day in the community; the position was special risk capital for investors; and after the rise was far greater than the original hypothesis, he did not revise "originally planned for six months" to "now I’ll hold for ten years."
The parts that cannot be replicated: the $25 million itself would become news and a catalyst; he could write directly to the board; he had training in options and credit markets, not merely looking at market colors. If new entrants merely replicate "heavily invest in a dying asset," they are replicating tail risk, not his profits.
What new entrants should look for: a checklist that can be used immediately
Below is arranged in "structure first, story later." Everyone can tell stories, but structure determines whether you can leave alive.
1. What phase is this meme in, not what it is called.

It can generally be divided into four stages: cold start (only a meme and extremely thin liquidity), diffusion (community and smart money start referencing it), main rise (exchanges/celebrities/options chains fully engage), and distribution after narrative realization (large holders unloading, unlocking, explosion of knock-offs).

New funds are most easily entered in the latter half of the third stage, that is, when the media headline has already written "another myth." Freeman bought during the transition from the second stage to the third stage, while the price was still at a level regarded as bankruptcy pricing; most who lost money bought at the climax of the third stage.
2. Is there enough liquidity for you to exit?

The question is not "Is today's turnover large?" but: how much slippage will your position experience relative to the market depth when you sell.

For stocks, look at: average daily volume, bid-ask spread, open options, and whether there are risks of suspension.

For crypto, monitor: the main pool depth, withdrawal rights, whether the locks are verifiable, and if there can be additional issuance/tax modifications.

Rule of thumb: if the nominal value of the largest several independent positions exceeds available liquidity, it turns out that this asset is not a market for newcomers but a hostage situation.
3. Who holds the chips?

For stocks: institutional 13F/13G, insider selling, short interest, whether the circulating pool is extremely small. The key for BBBY is not "many retail investors," but when symbolic major shareholders like Cohen sell—once he sells, the identity narrative breaks.

For crypto: what proportion is held by the top 10 addresses (excluding LPs, destruction, exchanges), whether the deployer can still mint, and whether there are hidden distributions. Having a large number of holders looks good, but if the funds are from the same source, it's just a disguise for a single entity's group.
4. Are there unused catalysts in the narrative?

Available catalysts must be events "that haven't happened yet, but the market has already begun pricing": celebrities have not clearly endorsed, major exchanges have not listed the coin, shorts have not concentrated for covering, and the company has not used the high stock price for financing.

Events that have already occurred act as excuses for unloading. Once Cohen-related options and holdings are fully interpreted by the community, the marginal new information on this line diminishes; thereafter, there are only negative information such as selling announcements.
5. Will the fundamentals "retrieve" the price within the window?

Meme stocks can temporarily ignore fundamentals but cannot forever ignore debt repayment dates, payroll dates, unlocking dates, and court dates. BBBY's debt and cash shortfall did not disappear because the stock price reached $27; it merely provided the company with a window that could have been used for self-rescue. The company did not make good use of this, and once the window closed, the fundamentals resumed their original trajectory.

Correspondingly in crypto: team wallets expire, LPs unlock, knock-offs divert attention, and new hotspots on the main chain draw away focus.
6. Are your own rules executable?

At the very least, clarify four rules written outside the trade: maximum loss, segmented profit-taking, what news necessitates reducing positions (insider selling, sudden liquidity drop, deployer moving LP), conditions under which no additional positions can be opened in a single day.

Without these four rules, the checklist is just reading material.
Real case: the same BBBY, two completely different trades
Breaking down the period from July 2022 to April 2023 reveals the complete lifecycle of a meme.
Stage A: Priced as junk (July)

The company just announced a terrible quarterly report and replaced its CEO, with the stock price falling below $5. The short selling logic is complete: sales declining, cash low, debt high, and store models outdated. Freeman's reason for buying was not "it's actually a good company," but "the market has set the survival probability too low, and high volatility can be used to restructure the debt." This is a structural trade, conveniently growing within the shell of a meme.
Stage B: Attention and microstructure resonance (early August)

Reddit and the options chain concurrently heated up, and the price departed from any reasonable operational forecast. Freeman's original target of $8–9 was quickly breached. During this stage, profits came from: new retail entrants, short covering, market maker hedging. None of these layers involved "towels and storage boxes suddenly selling better."
Stage C: Symbolic shareholders exit (August 16-18)

Freeman sold first. After Cohen's sell-off disclosure, the community lost its maximal external anchor for self-justification. The stock price retreated from the peak to around $11. Within days, the same group that was shouting "it's just the beginning" at $20 faced deteriorating liquidity and narrative reversal.
Stage D: Fundamentals regain pricing power (end of 2022 to April 2023)

High stock prices did not automatically turn into a healthy balance sheet. Subsequent financing, dilution, debt obligations, and operational cash flow deteriorated until bankruptcy. For those who picked up at the peak in August and planned to "hold long-term for a change of fate," losses were not just fluctuations but rather the conclusion of a capital path. The bankruptcy documents related from September 2023 clarify: shares were canceled, and have no value.
The distribution on the same target is quite clear:
●Freeman: bought in the bankruptcy pricing zone, sold near the peak of attention, with a profit of around $110 million.
●Cohen: positioned earlier and realized profits during the squeeze, equally a window trader.
●Those treating BBBY like GME II and refusing to acknowledge exit conditions: first experienced over a 50% drawdown, then faced delisting and equity becoming worthless.
This illustrates the most stable structure of the meme market: early structural traders realize volatility, while later faith holders bear the consequences of liquidation.
The same breakdown can be applied to crypto. Taking the dogwifhat (WIF) at the end of 2023 as an example: first, there was a long-circulating meme, then a thin liquidity on-chain issuance, followed by KOL diffusion, major exchanges listing, and market cap shooting into the billions; early participants received the benefit of attention expansion, while later followers faced volatility, diversion, and narrative fatigue. Its "lack of utility" does not preclude it from becoming one of the largest speculative containers within months, as long as: you buy during the dissemination phase, not with the belief that "dogs should equal a public company."
If new entrants had to choose with a single sentence, it would be:

Only engage with assets where you can clearly say "who will be your counterparty, why haven't they bought yet, and at which information disclosure point will you hand them the chips."

If you cannot articulate these three questions, it is not yet a trade; you are merely being carried away by the price as an observer.
To those ready to put real money on the line
Memes will always exist because attention is cheaper than income statements, social media is faster than annual reports, and lottery-like returns better match short-term dopamine. Regulation, interest rate hikes, and a proliferation of main assets will only change its share of the market, making it hard to eliminate.
But it is not an asset class that needs to be "believed in." It is closer to a competitive arena with ongoing entries: the rules are public, the expectations are often negative, and occasionally windows of positive expectations are amplified. Freeman seized the window; he did not buy into BBBY's business model. Those outside the window lost the same stock using the same language.
If you still decide to play with a portion of your funds, consider the following five points as hard limits rather than suggestions:
1. Isolate speculative budgets from investment portfolios; losses should not impact normal living and long-term holdings.
2. For single assets, ensure they are small enough to sell easily, but large enough not to warrant modifying exit rules.
3. Check liquidity, chip ownership, rights, and catalysts first, then look at K-lines and group messages.
4. Reduce positions if the rise exceeds the original assumption, rather than enlarging the assumption.
5. Write "going to zero" as an accepted outcome in advance; if you cannot accept going to zero, do not participate in this asset.
The myth of August 2022 can be repeatedly reproduced because the numbers are round, the characters are young, and the cycles are short. The bankruptcy documents from April 2023 have not been disseminated equally but are the latter half of the same trade. Deciding to place an order only after reading the complete sentence is the true takeaway from this article.
 

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