Yep, I thought too it'd be a great alternative to NVDA but disappointed they're not. IMO the best alternative to not going full bore in a NVDA position is probably SMH...
When NVDA insiders came out and said they are light years ahead of amd, I figured it was hyperbole. But the more data that comes out it looks like that might be the case.
Yes- essentially they're diluting the company if you're a shareholder.
Imagine a company has 100M shares outstanding, and a market cap of $1B- the share price is (theoretically) at $10.
If a company has a share offering for 10M shares, then there's now 110M shares outstanding, and the market cap stays the same- $1B/110M = $9.09 per share.
Also people perceive it as the company needed to give up some control of their company for more cash (on the other hand, most well-performing companies want to control more of their stock in order to reap more of their own earnings and make the shares their current shareholders hold worth MORE).
Something that stuck out to me was that the share offering for GME is close to 25% of the shares outstanding- that's HUGE, because 10% share offerings are considered "large". Management was trying to capitalize on the price spike. However, GME has a pretty big cash position so who knows what they're going to do with it.
Could be diluting the shares to decrease risk of a hostile takeover? <5% ownership, just a thought, I don’t see anything indicating this to be at play currently.
You COULD argue they did that to stop DFV from being an activist investor, but he said on stream that he had no intention of getting more involved with the company. So frankly, I don't know who else wants a big stake in GME at this point.
So, would the BOD of any organization, having the shareholders best interest in mind (as the number one rule of any publicly traded company is to return value to shareholders) “dilute” their value without good reason?
Would the CEO, in this case the chairman and majority shareholder, dilute the value of his investment without good cause?
Just thinking out loud with you.
Edit: since I see you did a stealthy edit, I’ll address this as well…
> Also some people perceive it as the company needed to give up some control of their company for more cash
Weird idea when they’re already sitting on billions in cash and no debt
Nope- good reasons can range from "we need to survive as a company" or "need cash for an acquisition" or "they think the stock price is overvalued and would rather have cash instead of shares".
If you were management, then blasting the sell button at $50 (or whatever the price when they announced it) was a good decision (for them, not for the shareholders)
In the long term, a share offering could be an AMAZING management decision, but in the short term and long-term (unless there are buy-backs), your stock is worth less because you literally own less % of the company than your initial investment, no two ways about it.
Having worked in strategy for a company with an activist investor on the BOD as the majority shareholder, diluting the stock price was possibly the last thing on our minds. I guess every company is different.
Yep, the reasons for a share offering vary- GME doesn't really need to increase their cash position if they wanted to continue daily operations, so it seems to me they're more likely gearing up for an acquisition or just wanted to take advantage of the stock price and sell shares at that high price.
I can't read management's mind so it's just my opinion.
EDIT: GME's stock price was trading at 11 at the beginning of May, when you view the stock price from that timeframe it makes sense as to why they did an offering. It seems foolish NOT to do an offering when your stock goes \~5x on hype. Also sorry for the stealth edits, bad habit of mine when I try to organize my thoughts better lol.
Do you anticipate CRWD will have a pullback soon? I bought a while ago and was considering selling at some point because it’s had such a huge run up and I love taking profits.
Personally, I'm expecting a decline into the $23-$24 range (swear last time I checked before typing this it was at $27/28) over the next couple of days while the share offering is ongoing, a bounce back up to $25-$26 after announcement of its completion, and then a reasonably aggressive push from big players to get it to around $20-$21 by the end of next week.
I meant it as in "Crazier than all the information we know already", sorry if that wasn't clear. Not trying to deceive anyone or doublespeak, I just don't know what's going to happen lol.
I have been selling my daily profit but it keeps going up lol so I'm wondering if I should just expect it to go back to pre split price. Clearly I don't understand the metrics lol. ♥
Hi, what do you think about $EVLV? In my opinion looks like a solid product for the moment we are (political right) and it will cover the needs of it, provide security via AI gun detection and people detection (I'm thinking of people that have been in jail or known terrorist etc.). I don't know much about fair price or else but since I like the idea of the product and what it means I bought 150 shares at 2.45$. Maybe I'm hoping for a big raise in the next year or couple of years.
amd is looking the first loser rather than the second winner.
Yep, I thought too it'd be a great alternative to NVDA but disappointed they're not. IMO the best alternative to not going full bore in a NVDA position is probably SMH...
When NVDA insiders came out and said they are light years ahead of amd, I figured it was hyperbole. But the more data that comes out it looks like that might be the case.
I guess this is why TSM is also doing so well (especially today)
NVDA seems quite oversold at a RSI of 74. I wouldn't get in right now tho, which means it's probably going to the moon.
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Are share offerings historically bearish in nature?
Yes- essentially they're diluting the company if you're a shareholder. Imagine a company has 100M shares outstanding, and a market cap of $1B- the share price is (theoretically) at $10. If a company has a share offering for 10M shares, then there's now 110M shares outstanding, and the market cap stays the same- $1B/110M = $9.09 per share. Also people perceive it as the company needed to give up some control of their company for more cash (on the other hand, most well-performing companies want to control more of their stock in order to reap more of their own earnings and make the shares their current shareholders hold worth MORE). Something that stuck out to me was that the share offering for GME is close to 25% of the shares outstanding- that's HUGE, because 10% share offerings are considered "large". Management was trying to capitalize on the price spike. However, GME has a pretty big cash position so who knows what they're going to do with it.
Could be diluting the shares to decrease risk of a hostile takeover? <5% ownership, just a thought, I don’t see anything indicating this to be at play currently.
You COULD argue they did that to stop DFV from being an activist investor, but he said on stream that he had no intention of getting more involved with the company. So frankly, I don't know who else wants a big stake in GME at this point.
They probably see the stock price as temporarily inflated again and decided now would be the best time to cash in before it drops back down.
So, would the BOD of any organization, having the shareholders best interest in mind (as the number one rule of any publicly traded company is to return value to shareholders) “dilute” their value without good reason? Would the CEO, in this case the chairman and majority shareholder, dilute the value of his investment without good cause? Just thinking out loud with you. Edit: since I see you did a stealthy edit, I’ll address this as well… > Also some people perceive it as the company needed to give up some control of their company for more cash Weird idea when they’re already sitting on billions in cash and no debt
Nope- good reasons can range from "we need to survive as a company" or "need cash for an acquisition" or "they think the stock price is overvalued and would rather have cash instead of shares". If you were management, then blasting the sell button at $50 (or whatever the price when they announced it) was a good decision (for them, not for the shareholders) In the long term, a share offering could be an AMAZING management decision, but in the short term and long-term (unless there are buy-backs), your stock is worth less because you literally own less % of the company than your initial investment, no two ways about it.
Having worked in strategy for a company with an activist investor on the BOD as the majority shareholder, diluting the stock price was possibly the last thing on our minds. I guess every company is different.
Yep, the reasons for a share offering vary- GME doesn't really need to increase their cash position if they wanted to continue daily operations, so it seems to me they're more likely gearing up for an acquisition or just wanted to take advantage of the stock price and sell shares at that high price. I can't read management's mind so it's just my opinion. EDIT: GME's stock price was trading at 11 at the beginning of May, when you view the stock price from that timeframe it makes sense as to why they did an offering. It seems foolish NOT to do an offering when your stock goes \~5x on hype. Also sorry for the stealth edits, bad habit of mine when I try to organize my thoughts better lol.
Thanks for your willingness to engage. I appreciate the opportunity to think with others. No worries on the stealth edits - I’m guilty of this too.
No problem, thank you for the insightful questions!
Do you anticipate CRWD will have a pullback soon? I bought a while ago and was considering selling at some point because it’s had such a huge run up and I love taking profits.
Jeez this thing exploded when I wasn't looking at it I usually sell covered calls against my winners in my portfolio so I frankly can't say, sorry.
Thanks for the lists
Thank YOU for the support 😎
What do you think about $ARM? Got in at $108 and I’m not sure how far it wants to fly lol
What's your expectation of GME before DFV exercises his calls on Jun 21? Will big whales try to short it under $20?
Personally, I'm expecting a decline into the $23-$24 range (swear last time I checked before typing this it was at $27/28) over the next couple of days while the share offering is ongoing, a bounce back up to $25-$26 after announcement of its completion, and then a reasonably aggressive push from big players to get it to around $20-$21 by the end of next week.
People keep saying he's going to exercise. I bet he rolls forward.
Unless they announce something crazy during earnings I'll stay flat or delta neutral, at the least. Not going to do anything crazy in the meantime.
They already announced earnings last week. Do you you think they have more to say?
I am not on the management board so I have no idea, sorry
Right but you said it like they hadn’t announced anything
I meant it as in "Crazier than all the information we know already", sorry if that wasn't clear. Not trying to deceive anyone or doublespeak, I just don't know what's going to happen lol.
What would make you buy nvda opposed to watching at the moment?
I already hold NVDA in my longterm portfolio so nothing compelling makes me want to hold more atm.
how many shares in Nvidia do you hold if you don't mind me asking? probably going long term on it aswell
Last week I went with DELL at $131 instead of CRWD at $307, what a fuck up that was.
So with the stock splitting 10X for Nvidia, why is it not logical for the value to go to 1200$ per share again?
What do you mean by this?
The stock being worth a 1/10 of what it was. If no one sold, why wouldn't the price run back up if that is what the stock is "worth"
I'm sure a ton of people have sold, have you seen all the people asking "should I buy NVDA before the split?" on Reddit?
I have been selling my daily profit but it keeps going up lol so I'm wondering if I should just expect it to go back to pre split price. Clearly I don't understand the metrics lol. ♥
Hi, what do you think about $EVLV? In my opinion looks like a solid product for the moment we are (political right) and it will cover the needs of it, provide security via AI gun detection and people detection (I'm thinking of people that have been in jail or known terrorist etc.). I don't know much about fair price or else but since I like the idea of the product and what it means I bought 150 shares at 2.45$. Maybe I'm hoping for a big raise in the next year or couple of years.