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Jul 08, 2023

The Moon Emoji Is Securities Fraud

Also micromanaged investment bankers and a chrome orb. Last August, Ryan Cohen did a very funny joke. Cohen — founder of online pet-food retailer Chewy, chairman of the board at GameStop Corp. and

Also micromanaged investment bankers and a chrome orb.

Last August, Ryan Cohen did a very funny joke. Cohen — founder of online pet-food retailer Chewy, chairman of the board at GameStop Corp. and general meme-stock influencer and activist — had spent about $121 million1 to buy about 9.8% of Bed Bath & Beyond Inc.’s stock in early 2022, and he sent Bed Bath’s board of directors a letter advocating some strategic changes. When his stake and activism were disclosed in March, the stock shot up 34% in one day, closing at $21.71 per share. But his strategy didn’t really work, Bed Bath kept deteriorating, and by August the stock was well below the $15 or so that Cohen had paid to buy it.

But then, on the morning of Aug. 16, Cohen re-disclosed that he owned those shares. Nothing had really changed: He had not bought any more stock since March, but since Bed Bath had done some (ill-advised!) stock buybacks in the interim, Cohen’s ownership had gone up to 11.8%, and he filed an updated Schedule 13D disclosure form saying so. “There have been no transactions in securities of the Issuer by the Reporting Persons during the past sixty days,” says the form, and “this Amendment No. 2 was triggered solely due to a change in the number of outstanding Shares of the Issuer.”