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Can a court case hinge on the meaning of a single emoji?
RICHARD WEINER
Technology for Lawyers
Published: August 11, 2023
What does a full moon emoji mean?
The answer to that question might be determinative of a substantial “meme stock” fraud case.
The case is In re Bed Bath & Beyond Corp. Securities Litigation, 2023 U.S. Dist. LEXIS 129613 (D.D.C. July 27, 2023); Accord: Friel v. Dapper Labs, Inc., No. 21-cv-5837, 2023 WL 2162747, at *17 (S.D.N.Y. Feb. 22, 2023) (finding same for rocket ship emojis).
The case involves the strange cycle of meme stocks from a couple of years ago.
If you need a reminder, meme stocks rocketed up in value during the worst times of the pandemic (here’s another reminder: COVID is still out there and still killing people).
A meme stock is traded on a stock exchange at a very low valuation and are run quickly up in value in bursts of activity that may be manipulations from people with large bank accounts.
The same thing happened with dogecoin and Elon Musk, for instance.
The Bed, Bath and Beyond case, instant, involves one Ryan Cohen, who made his fortune running pet food website Chewy.com.
Playing the market, he threw a bunch of bucks at low-value business failure Bed, Bath and Beyond stock, acquiring about 9% of the company.
He then tweeted out “At least her cart is full” followed by a full moon face emoji in response to a negative story about the stock.
In some circles, apparently, that meant that the stock was going “to the moon,” or rising in value.
The stock rose quickly, and Cohen sold, pocketing millions.
And then he got sued.
And lost.
Cohen argued that emojis are symbols and symbols are not words, and therefore he did nothing actionable.
The court said: “Emojis may be actionable if they communicate an idea that would otherwise be actionable. A fraudster may not escape liability simply because he used an emoji. Just like with words, liability will turn on the emoji’s particular meaning in context.”
Very interesting decision to read. Pretty cutting edge.
Shoutout, thanks for the tip and analysis to the Eric Goldman blog.
Also, disclosure (not that any of you care, but), I bought some NFTs from Dapper Labs and made some coin.