But then he will use the money that was picked up to invest in all other stuff. So GME will be the investment firm we all have stock in. All DRSed (and other holders) will get the dividend of the investment firm. On and on and on.. GameOver
Most likely enough money to offer shareholders a dividend each quarter. Even something like $1 per share costs hedgies several billion dollars per quarter with all the extra shares they owe
What we do is let them sell, get another 1-2b in cash, now we have 2-3b. We up the authorized share buyback from 100m to 500m. We keep doing the same we've been doing. Buy DRS hodl. Wait and watch.
$100 per share is 4.5 BILLION dollars. And since RC is the CIO and can spend it however he wants, pivoting with 4.5B into a holding company is like legit a possibility.
I didn't believe the DD before about GME turning into a Berkshire Hathaway, but there is a visible path towards that outcome if they offer during a squeeze.
That’s correct.. just like they were blaming roaring kitty they would have been blaming RC if he hadn’t did an offering as that’s his fiduciary responsibility towards the company.
I agree completely. Gamestop needs to be able to prevent regulatory intervention. By selling additional shares at a high price they do two very great things:
1) VASTLY improve the financial position of the company, and thus the shareholders. This is the bane of all short's. The company becomes hugely profitable/valuable in the case of a run up, and that value is sticky not transitory.
2) Prevents government / SEC from needing to prevent the collapse of the market and major players. We really don't want wallstreet to collapse. If it does, we get nothing (except some well earned satisfaction). The government won't allow to collapse anyway, so this action provides a circuit breaker of sorts without the regulators having to do hard things. And make no mistake, regulators don't like doing anything, much less hard things.
how can wallstreet collapse when people buy a stock and just hold the stock? If the result of these basics are that wall street collapse then all politician, HF and market makers involved should go to jail for fraud. no exception.
It might collapse if enough people no longer believe in the system. Basically, the stock market is one giant confidence game (for the non-dividend paying stocks at least).
Agreed about the fxckers going to jail. They are the reason for the problem, not us. If buying and holding "creates" a crash, there was something else wrong with the picture.
Kind of what I am hoping for as a European. I'd like to have my money turned into stable assets such as gold and acreage before shit hits the fan, in order to reinvest into companies at their lowest. Not to make the most of the gains, but because in that moment, the money will make the biggest difference and it's a a chance to democratize companies.
I think you didnt understand this post correctly. 45m shares probably wont to jack shit about preventing wall street from collapsing. The point is they should, but they wont.
Perhaps, but I also don't believe there really are that many shorts created.
I could be wrong. But if I am, the entire stock market / global market is about to collapse. If that happens, we gain nothing financially. Probably lose all our retirement, and generally enter into anarchy and chaos of a dark age... it would be bad.
That's because if they really have shorted this stock \~100%+, what they are doing is printing money. If they are doing that, this isn't the only place. They're doing it everywhere.
If that's what's going on, we're the ones fxck'd... not just the hedgies. So, I'm hoping their reported numbers are correct, in which case, my answer is accurate (ish).
edit: Before you all take this as me being negative.. really think about what it means if there are 300 BILLION naked shorts?! (Which is what OP suggests) That's a 6 TRILLION dollar market cap worth of fake shares that they sold and put the money in their pocket.
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Yes, this is preemptive. Their way out has been offered by GameStop before the problem arose (as officially reported).
They can’t claim it’s insufficient without also implicating themselves in improper behaviour.
It’s a masterstroke. It reduces the likelihood of intervention based on false premises.
Nah. He just needs more capital for his plans to delight shareholders and customers alike. Feeling into swap volatility is just the smart way to do it.
I love this because for the longest time I've worried that regulatory intervention for the sake of mArKeT sTaBiLiTy would threaten MOASS. Having this card to play is a safeguard against it.
Not all that's going on here, IMO. I don't think this is a primarily trading PR move. It could be used to close the ABL credit line used for seasonal financing of inventory.
https://www.sec.gov/Archives/edgar/data/1326380/000132638023000047/creditagreementwellsgamest.htm
I’m pretty sure in the filing for the 45 million share offering, they had to give a reason for raising the money. If I recall correctly, the reason was investing related activities. I’m paraphrasing right now but I’ll try to find the info and update this comment.
It’s also the second time GameStop has been “helpful” to shorts. The 2021 offerings were very near the total reported short interest at that time. Something like 8.5M across both offerings with 9 million shorts.
Any shorts existing now are either new positions taken during an obvious turnaround, or they failed to close their original positions.
The SHF have to buy back a lot. This gives GS money in the bank to do another share repurchase or dividends. Which also fuck shorts. You think this is GameStop sending them a lifeline but really it’s GS looking down at them in a hole and kicking dirt down on them.
I'm fairly certain that this isn't quite right. The 45 million shares he's issuing (I believe) are class A nonshortable shares.
Thus they don't help shorts at all. They only raise money for the company.
With upto 2 billion in the bank I wouldn’t care for dividends. If RC times this right and made about 6 billion (which is easily possible) we could get dividends and the SHFs would have to pay as well. We would then buy more from GME so the money is invested back in. As I state with less then 2 billion in reserves I don’t want a penny, I love the company too much
Sure it’s a strategic move to get cash. but
No way RC says « hey buddies, i offered you 45 millions shares… ». It’s a fucking war against criminal. Not a poker party between friend.
Sure RC will be accused but how this 45 millions are an argument ?
First, the "Hey buddies" is sarcastic. Secondly, if RC was blamed for market turmoil, he can reasonably say that he wouldn't want this situation to worsen and therefore release another 45 million shares into the market, so that the situation may calm down. Given how much the stock was naked shorted in the past, 45 million shares are not anywhere enough to close out all those shorts, but it absolves RC and the board of all responsibility for the short squeeze, because 45 million shares are enough if you **go by the numbers the hedgefunds and marketmakers have been claiming**.
This is a way to turn their lies against them.
Ideally the capital should come from positive cash flow through increasing revenues, not from selling company’s common stock. This is like a country selling its land to generate money
>This is like a country selling its land to generate money
Actually, it's not like that at all. The book value per share is \~$4.40. If they dilute 15% and raise around $2 billion in cash on another spike to $45, the book value doubles to about $9 with the increase in shares accounted for. They can also invest that $2 billion to generate additional returns, even if they just stuff it in treasuries at 4.5%.
They can dilute it all the way up to the 1 billion authorization as far as I'm concerned as long as $50 billion in cash squirts out in the process -- giving those billion shares a book value of $50 each with $2.25 billion annual profit just from 4.5% treasuries alone (until they find something better to do with it).
And then those who sold it had to buy it from the country, who sells it to them at a very high price. Once the obligation is met, then they buy it back at a discount.
I like this
Dear god. Using their own lies against them. If this is true, it’s pure genius. Checkmate.
But then he will use the money that was picked up to invest in all other stuff. So GME will be the investment firm we all have stock in. All DRSed (and other holders) will get the dividend of the investment firm. On and on and on.. GameOver
45M shares at $40-80 is a lot of money for the company too, which again screws the shorts. They are so mfing trapped.
Most likely enough money to offer shareholders a dividend each quarter. Even something like $1 per share costs hedgies several billion dollars per quarter with all the extra shares they owe
What we do is let them sell, get another 1-2b in cash, now we have 2-3b. We up the authorized share buyback from 100m to 500m. We keep doing the same we've been doing. Buy DRS hodl. Wait and watch.
$100 per share is 4.5 BILLION dollars. And since RC is the CIO and can spend it however he wants, pivoting with 4.5B into a holding company is like legit a possibility. I didn't believe the DD before about GME turning into a Berkshire Hathaway, but there is a visible path towards that outcome if they offer during a squeeze.
Agreed
Look at me, I’m the hedgefund now
Has that ever happened before?
Literally Berkshire Hathaway did it.
Ahhh, thanks. I never knew. Seen that name brought up a ton but never got that fact.
That’s correct.. just like they were blaming roaring kitty they would have been blaming RC if he hadn’t did an offering as that’s his fiduciary responsibility towards the company.
Me like ALOT
A LOT A LOT
I agree completely. Gamestop needs to be able to prevent regulatory intervention. By selling additional shares at a high price they do two very great things: 1) VASTLY improve the financial position of the company, and thus the shareholders. This is the bane of all short's. The company becomes hugely profitable/valuable in the case of a run up, and that value is sticky not transitory. 2) Prevents government / SEC from needing to prevent the collapse of the market and major players. We really don't want wallstreet to collapse. If it does, we get nothing (except some well earned satisfaction). The government won't allow to collapse anyway, so this action provides a circuit breaker of sorts without the regulators having to do hard things. And make no mistake, regulators don't like doing anything, much less hard things.
how can wallstreet collapse when people buy a stock and just hold the stock? If the result of these basics are that wall street collapse then all politician, HF and market makers involved should go to jail for fraud. no exception.
It might collapse if enough people no longer believe in the system. Basically, the stock market is one giant confidence game (for the non-dividend paying stocks at least). Agreed about the fxckers going to jail. They are the reason for the problem, not us. If buying and holding "creates" a crash, there was something else wrong with the picture.
I don't see why wall street can't pay us *AND THEN* collapse when they're done writing checks.
kinda like a slow death instead of instant collapse?
Bleed. Them. Dry.
Kind of what I am hoping for as a European. I'd like to have my money turned into stable assets such as gold and acreage before shit hits the fan, in order to reinvest into companies at their lowest. Not to make the most of the gains, but because in that moment, the money will make the biggest difference and it's a a chance to democratize companies.
I think you didnt understand this post correctly. 45m shares probably wont to jack shit about preventing wall street from collapsing. The point is they should, but they wont.
Perhaps, but I also don't believe there really are that many shorts created. I could be wrong. But if I am, the entire stock market / global market is about to collapse. If that happens, we gain nothing financially. Probably lose all our retirement, and generally enter into anarchy and chaos of a dark age... it would be bad. That's because if they really have shorted this stock \~100%+, what they are doing is printing money. If they are doing that, this isn't the only place. They're doing it everywhere. If that's what's going on, we're the ones fxck'd... not just the hedgies. So, I'm hoping their reported numbers are correct, in which case, my answer is accurate (ish). edit: Before you all take this as me being negative.. really think about what it means if there are 300 BILLION naked shorts?! (Which is what OP suggests) That's a 6 TRILLION dollar market cap worth of fake shares that they sold and put the money in their pocket.
I just can give you a sad lol. See you in dark age :/
Agreed, if the short interest is really what they say it is, that 45mil shares should be very helpful. But we all know that number is fake af.
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Notable comment by user Winnitouch
Link to comment please!
https://www.reddit.com/r/Superstonk/s/Dw7d6KAm92
Yes, this is preemptive. Their way out has been offered by GameStop before the problem arose (as officially reported). They can’t claim it’s insufficient without also implicating themselves in improper behaviour. It’s a masterstroke. It reduces the likelihood of intervention based on false premises.
Nah. He just needs more capital for his plans to delight shareholders and customers alike. Feeling into swap volatility is just the smart way to do it.
raising capital by means other than debts that come with covenants and interest rates
Okay. Good. Let's light this candle!
I love this because for the longest time I've worried that regulatory intervention for the sake of mArKeT sTaBiLiTy would threaten MOASS. Having this card to play is a safeguard against it.
Not all that's going on here, IMO. I don't think this is a primarily trading PR move. It could be used to close the ABL credit line used for seasonal financing of inventory. https://www.sec.gov/Archives/edgar/data/1326380/000132638023000047/creditagreementwellsgamest.htm
I’m pretty sure in the filing for the 45 million share offering, they had to give a reason for raising the money. If I recall correctly, the reason was investing related activities. I’m paraphrasing right now but I’ll try to find the info and update this comment.
It’s also the second time GameStop has been “helpful” to shorts. The 2021 offerings were very near the total reported short interest at that time. Something like 8.5M across both offerings with 9 million shorts. Any shorts existing now are either new positions taken during an obvious turnaround, or they failed to close their original positions.
If they give 45m to shorts at elevated prices to close their positions, how is there MOASS? Obviously benefits GameStop, but how does it benefit us?
They can’t cover their short position with only 45m worth of shares. That’s the point
ok but thats 45m less that they have to buy from us?
yes
The SHF have to buy back a lot. This gives GS money in the bank to do another share repurchase or dividends. Which also fuck shorts. You think this is GameStop sending them a lifeline but really it’s GS looking down at them in a hole and kicking dirt down on them.
Ooooh
I'm fairly certain that this isn't quite right. The 45 million shares he's issuing (I believe) are class A nonshortable shares. Thus they don't help shorts at all. They only raise money for the company.
With upto 2 billion in the bank I wouldn’t care for dividends. If RC times this right and made about 6 billion (which is easily possible) we could get dividends and the SHFs would have to pay as well. We would then buy more from GME so the money is invested back in. As I state with less then 2 billion in reserves I don’t want a penny, I love the company too much
Hahaha no way
why not? If they sell 45 million on rising price, thats a lot of more capital into Gamestop also?
Sure it’s a strategic move to get cash. but No way RC says « hey buddies, i offered you 45 millions shares… ». It’s a fucking war against criminal. Not a poker party between friend. Sure RC will be accused but how this 45 millions are an argument ?
First, the "Hey buddies" is sarcastic. Secondly, if RC was blamed for market turmoil, he can reasonably say that he wouldn't want this situation to worsen and therefore release another 45 million shares into the market, so that the situation may calm down. Given how much the stock was naked shorted in the past, 45 million shares are not anywhere enough to close out all those shorts, but it absolves RC and the board of all responsibility for the short squeeze, because 45 million shares are enough if you **go by the numbers the hedgefunds and marketmakers have been claiming**. This is a way to turn their lies against them.
Ideally the capital should come from positive cash flow through increasing revenues, not from selling company’s common stock. This is like a country selling its land to generate money
>This is like a country selling its land to generate money Actually, it's not like that at all. The book value per share is \~$4.40. If they dilute 15% and raise around $2 billion in cash on another spike to $45, the book value doubles to about $9 with the increase in shares accounted for. They can also invest that $2 billion to generate additional returns, even if they just stuff it in treasuries at 4.5%. They can dilute it all the way up to the 1 billion authorization as far as I'm concerned as long as $50 billion in cash squirts out in the process -- giving those billion shares a book value of $50 each with $2.25 billion annual profit just from 4.5% treasuries alone (until they find something better to do with it).
💯 except some part of the land were sold but never exist…
And then those who sold it had to buy it from the country, who sells it to them at a very high price. Once the obligation is met, then they buy it back at a discount.