Meme stock investor Ryan Cohen, known for his involvement in GameStop’s stock frenzy earlier this year, is now facing a securities fraud lawsuit filed by Bed Bath & Beyond shareholders. The lawsuit alleges that Cohen’s use of a smiling moon emoji in a tweet constituted securities fraud.
In a surprising development, a federal judge ruled that emojis have the same legal weight as words, setting a precedent for future cases. The ruling stems from Cohen’s tweet, which included the smiling moon emoji, and was interpreted by meme stock investors as a sign of confidence in Bed Bath & Beyond’s stock.
Cohen’s tweet proved to be consequential as he sold his shares of Bed Bath & Beyond during a rally for meme stocks, resulting in a staggering $68 million profit. However, shortly after his sell-off, the stock price dropped significantly, leaving shareholders in turmoil.
Bed Bath & Beyond shares are currently trading at a measly $0.29, marking a jaw-dropping 99% drop from their record price. The company’s struggle was already evident before Cohen’s controversial actions, as Wall Street analysts had given a poor prognosis for the business. In fact, the retailer filed for bankruptcy in April, after failed attempts to improve its financial situation.
Cohen attempted to dismiss the lawsuit against him, claiming that he sold the stock because his views on the company had changed. However, the judge’s ruling clarified that emojis can be held liable to the same degree as words, opening the door for the lawsuit to proceed.
It remains to be seen how this lawsuit will unfold, but it certainly highlights the potential legal consequences associated with the use of emojis in financial communications. As investors increasingly turn to social media for investment guidance, this ruling serves as a wake-up call for careful consideration of how emojis may be interpreted in market movements.
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