Meme-stock hero Ryan Cohen faces Bed Bath & Beyond shareholder lawsuit over emoji-fueled rally
Ryan Cohen will have to face a securities fraud lawsuit from Bed Bath & Beyond shareholders, as the meme-stock hero's use of a single emoji could hold him liable for securities fraud, a federal judge ruled last week.
"In the meme stock 'subculture,' moon emojis are associated with the phrase 'to the moon,' which investors use to indicate that a stock will rise,'" Washington DC district judge Trevor McFadden said in a ruling last Thursday."So meme stock investors conceivably understood Cohen's tweet to mean that Cohen was confident in Bed Bath and that he was encouraging them to act.
Cohen purchased the shares of the now-bankrupt retailer when the price of the stock was in the range of $13-$17, according to Securities and Exchange Commission filings, and sold his entire stake when the stock price jumped to $30 in August. Shortly after Cohen's sale, the stock plummeted to just $0.30 per share.
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