🛌🛁 The Meme-Stock Savior + Update
Happy Hump Day everyone,
Welcome to all the new readers and welcome back to our loyal subscribers! Yet another week we get to cover everything interesting that happened in the markets. Let’s make it over the Hump together!
This week the west continued to sanction Russia, the price of nickel just exploded along with corn and wheat, a gallon of gas in the US just hit an average of $4 a gallon, and Ukraine began accepting Dogecoin donations 🤯
As you can see, no shortage of craziness in the markets but the one-stop shop for all your bedding, bathroom and kitchen needs, Bed Bath & Beyond, refused to be outdone. Over the weekend, Ryan Cohen, co-founder of pet-supplies retailer Chewy and more famously chairman of GameStop, disclosed a 9.8% stake in $BBBY. After yet another disappointing sales quarter for the retailer, Cohen sent a letter to the board which outlined the steps it should take to turn the company around.
During the meme-stock frenzy in the summer of 2021, $BBBY’s stock price hit almost $53 at one point but since then, its been all downhill from there. Before trading opened on Monday, the stock price hovered around $16 and shot up 85% following Cohen’s disclosure.
Cohen was able to influence the price in this way because he’d built a band of loyal followers on Reddit and Twitter due to his cryptic tweets that frequently go viral. Similar to Elon Musk, he has amassed a following of “groupies” that will buy anything that he is in; think back to when Elon Musk tweeted that Tesla was going to accept Bitcoin.
The problem with this however, is that in the case of Elon, little to no value is actually being created in the crypto or meme-stocks he’s tweeting about. It’s all hype. For many of his groupies, they get stuck holding the bag waiting for the day Elon decides to make another tweet pumping it back up again. Cohen is a slightly different scenario as he plans to offer strategic help to both GameStop and Bed Bath & Beyond but the hype continues to surround his stock disclosures. Only time will tell if he can live up to it.
We hope you enjoy this week’s Hump Days and if you did, please consider sharing with a friend!
-Humphrey & Rickie
Personal News
The team and I are taking a short break from YouTube (max 1-2 week break) as we decide how to reimagine our content strategy.
We are thinking of pursuing video explainers on different topics from an economic standpoint. In addition, we may add more “challenge” style videos where I try a certain activity or investment and report back on my findings.
The principles of the channel will remain the same: education about finance and how the business world works.
We’ll be excited to share our next video with you all, so thank you for continuing to follow!
In the Markets
Weekly News Roundup
Russia Is Now the World’s Most-Sanctioned Nation (BBG)
Russia has overtaken Iran and North Korea to become the world’s most sanctioned nation just 10 days after Vladimir Putin ordered the invasion of Ukraine. The 5,530+ sanctions on Russian oligarchs and the Russian economy have caused Russia’s top billionaires to lose more than $80B in wealth in recent weeks, with more to come.
RH: The guy that was once tracking the location of Elon Musk’s jet has now moved on to locating the super-yachts of Russian oligarchs in the hopes they get seized.
HY: Love the story of the above guy. Brilliant teenager who is getting a lot of attention. In terms of sanctions, I’m eager to see how long this plays out and how long it takes for enough economic pressure to mount on Russia to urge a change.
Bed Bath & Beyond Stock Price Soars More Than 60% on Ryan Cohen’s Stake (WSJ)
Ryan Cohen, billionaire co-founder of pet-supplies retailer Chewy Inc and chairman of GameStop, disclosed a 9.8% stake in Bed Bath & Beyond ($BBBY) and the stock price soared as high as 60% above the opening price. The large stake by Cohen is reminiscent of his move to take over GameStop’s board back in 2020.
HY: Probably too late to buy this stock, but not sure, perhaps we can look into this particular stock on the Patreon for this coming week.
Russia Warns of $300 Oil, Threatens to Cut Off European Gas (CNBC)
Oil prices soared to 14-year highs on Monday as both Brent crude and WTI futures hovered over $120 a barrel. In response to crippling economic sanctions centred around energy, Russian Deputy Prime Minister Alexander Novak threatened to cut off German supply through the Nord Stream 1 pipeline and warned of $300 oil in the West.
RH: Time for me to dust off my trusty bus pass.
HY: I’m not sure if it will hit “$300”, that seems lofty. Russia accounts for 5% exports of oil so any short term price spikes are going to be over-exaggerated and inflated due to the crisis.
In Case You Missed It
This week, I actually have this video from Ray Dalio that I thought was interesting and can help you have a framework for how to think about the current world situation.