Mind Medicine stock price soars after investor BBBY Freeman creates stake in MNMD
Psychedelic medicine and biotechnology company, Mind Medicine Inc. (MNMD), also known as MindMed, saw its stock price soar 38% on Thursday after it announced that a student, named Jake Freeman, who had won $110m (£93m) in Bed Bath and Beyond (BBBY) rally, also holds an activist stake in the pharmaceutical company, alongside his uncle.
A report by the FT detailed Freeman’s success, which saw the student receive a huge windfall on a $25 million investment, which ultimately earned him a huge profit in the US homewares company, as the stock price itself increased.
Mind Medicine Inc. (MNMD) Stock Price Chart
Freeman and his family, who purchased nearly 5 million shares in BBBY for less than $5.50 has seen the struggling furniture group’s price spike: this week alone, BBBY’s share price is up 43%.
“I certainly didn’t expect a vicious rally to the top. I thought it was going to be six months plus salary. I was really shocked when it went up so fast,” Freeman said in the interview. with the FT.
The report also described how the student, who is studying applied math and economics at the University of Southern California, also owns a 4.5% stake in Mind Med. (MNMD) and that he was keen to use his position to help improve Mind Med’s business strategy.
This revelation caused MNMD share price on the rise, knowing that a young student and his family had received a huge payment, after investing in BBBY and that now he has an investment in MNMDcreated a trading frenzy.
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A recipe for success
Freeman, who is the nephew of the co-founder and former CMO of MindMed (MNMD)Dr. Scott Freeman, was able to raise his first stake of $25 million in BBBY with the help of friends and family.
Dr. Scott Freeman, runs an investment fund called Freeman Capital Management Fund (FCM), partnered with his nephew and last week Freeman and his uncle wrote a harshly worded letter to the MindMed management team , calling on them to adopt its strategy of refocusing on their basic medicines and to reduce the consumption of cash.
Freeman and his uncle also posted a post on Reddit offering a “benefit plan.”
Bed Bath & Beyond (BBBY) Stock Price Chart
It wasn’t the first time that Freeman and his uncle had offered sound advice to the companies they invest in. In July, Freeman wrote another scathing letter to BBBY saying: “BBBY faces an existential crisis for her survival. To ensure its survival, BBBY must reduce its cash burn rate, significantly improve its capital structure and raise funds.
The pair also took to reddit at the time, with a post titled, “Give BBBY a chance.”
Shortly after the investment duo made the decision, BBBY stock surged.
That said, now that Freeman has invested in MindMed (MNMD)this psychedelic society could also become a stock of memes, alongside BBBY.
What was the catalyst?
Shares of BBBY began to rise after intense discussions began on social media site Reddit. On Wednesday, BBBY’s stock price had risen to $23, from August 15, when the stock price was $16.
BBBYwhich is one of the original meme stocks, alongside GameStop (GEM) and AMC Entertainment (AMC). are considered fun, people love to trade them and it is a craze that has fascinated the investment world, which many retail traders have taken advantage of.
GameStop (GEM) stock price chart
Know when to sell before you buy
The rise in meme stocks came from the GameStop (GME) stock run, which was made popular by Reddit forum Wall Street Bets. As this forum is on Reddit, it is populated with irony and a large dose of memes.
The Wall Street Bets group highlighted the stock move even among retail traders, who felt the rules of the markets were against them and favored hedge funds and more institutional investors.
For investors like Freeman, it seems his meme stock investing has paid off.
However, investing and meme stock expert Dr. Richard Smith told Capital.com: “If you want to trade meme stocks, you have to figure out how long you want to hold, if you want to trade those shares. Sure, volatility is good for you, but if you’re just buying because you think they’re going to go up because they have a bright future, that’s another thing.