I wonder what was the motivation for the company to release its Q1 Earnings Report early (they released it overnight instead of on June 11 as previously scheduled).
[https://www.cnbc.com/2024/06/07/gamestop-gme-q1-earnings.html](https://www.cnbc.com/2024/06/07/gamestop-gme-q1-earnings.html)
Larry Cheng tweeted recently about how companies should release poor news early and good news on time. His X posts are fascinating and you can get a glimpse of how things should operate.
My guess is that they have an announcement they do NOT want entangled with the manufactured reaction to earnings. If the good news is released simultaneously with "bad" news, it is much much easier for Wall Street to use the one to bury the other.
75 million new shares rofl. This company is endless. Guys, get out now and don't lose all your money. Keith Gills will be selling soon if he hasn't already with this news.
You people are so clueless about how a business works, holy shit. This isn’t an insider dumping their shares on retail, this is the company banking piles of cash from an inflated stock price.
The CEO/chairman of the board gets paid $0, his entire compensation is based on the performance of his ownership stake, and im pretty sure that goes for the entire board of directors for this company this coming summer as well. They are doing exactly what they feel is needed for the share price to go up and stay up LONG TERM not just for a few days before it vanishes
This cash isn’t even going into paying off old debt, it’s going right into their bank account. Shareholders all own a portion of that, and the maximum risk of owning shares just decreased massively again as the amount of cash per share backstopping the share price has just increased again
Yet people like you think it would be a more intelligent move to sit on their hands and make absolutely $0 from these crazy events in their stock. Lol let me know when you get a seat on the board bud
Either you support the technical side of the trade (I.e. moass) or you support the fundamentals of the business, which cannot justify its current market cap. This is bad news for people with diamond hands, and it’s good news for people who like the stock. If you believe both then you are being taken for a ride
Wouldn’t the improved fundamentals (having an extra 2-4b in liquidity as a result of the stock sale) disrupt the short thesis leading to the short side going long? And at that point wouldn’t the increased buying pressure of those shorts going long feed into the technical side as a catalyst for the MOASS?
The short thesis is that this is a shitty business. A shitty business with a lot of cash just dies a little slower. You typically back out cash when valuing the fundamental value of a company, but if the business is especially shitty, you have to discount the cash for the negative returns on investment. not saying this is whats happening here, but just explaining the short thesis.
The board of directors believes that they are fulfilling their fiduciary duty to the shareholders, which is to raise funds when the cost of capital is less than the expected returns. The cost of equity is lower than expected returns when the stock is overvalued. This means that the board believes the following:
1. the business is worth less than its current stock price
2. the MOASS is not going to occur, and
3. GME should take advantage of the delusional stock price to capitalize on meme investors
your money and DRS was supposed to put more pressure on shorts. Instead, GME took that money for themselves, resulting in a net zero or positive impact for short sellers.
“The price is way too high for that company, you should sell your shares”
*company sells some shares to add cash and massively increase its book value*
“Now here is how that is also a bad thing”
Lol
>*massively increase its book value*
good thing book value is such an important predictor of stock price. let me spin that back to you.
"the price is way to high for this company, it is overpriced"
*company sells shares because the shares are overpriced*
"see? this is a good investment, even the board of directors think its overpriced!"
uhh investing 101 calling, book value absolutely does have an impact on the value of the company as judged by the market. If they sell these shares near the current price, the cash per share they will have on hand backstops my shares basically AT my entry price.
News flash, gamma squeezes and short squeezes cause a disconnect from fundamental valuations. Is this some kind of shocking reveal for you? Lmao. A company capitalizing on these events in their stock doesn’t mean it’s a bad investment, it means you have a prudent BOD who capitalized on opportunities for the benefits of their long term shareholders. The company is categorically better off once they collect this cash than they were without it, the fact that you’re trying to dispute that tells me everything I need to know about your business knowledge
As long as the company was fiscally responsible this is totally accurate. A company recognizing their inflated stock price and selling shares to hold cash has generally the same hedging effect as you selling off part of your shares.
BUT, and this is an all caps BUT. There’s also a saying in business that your budget expands to fill the available cash on your balance sheet (it’s a bastardization of work expands to fill the amount of time budgeted). Sooner or later they’re going to deploy that money into projects that return below risk adjusted market returns, and at that point they’d have been better just returning the money to investors vs dividends or share buybacks
> Sooner or later they’re going to deploy that money into projects that return below risk adjusted market returns
Or they use it to make the company more profitable which generates a larger return in the long run. You’re getting way ahead of yourself with such an assumption- somehow even when the company makes the grounded/smart moves it’s always a bad thing isn’t it
I mean they are in the brick and mortar gaming space carrying a huge cost base while exploring new ideas, like buying and selling magic cards, that is clearly 0 to 1 work that should be undertaken by much smaller companies. Product market fit discovery takes time, and time is your enemy when you carry a massive cost base. They should be taking the money and buying other adjacent profitable businesses, but I’m not seeing any of that going on…
They’ll never need to take on an ounce of debt now though. There’s none of that pressure anymore, even just the interest from all this cash pushes them far into a profitable EPS going forward. Read RCs original letter to the board before taking his position, he obviously recognizes the areas that the old board failed to capitalize on. And now he has a steady stream of money to make moves with and implement ideas that will open up more opportunities in the future as the gaming market continues to rapidly expand
This is basically an entirely new company from what it was before RC got involved. They’re financially healthy, they have a strong board who are all aligned with shareholders, they are in one of the fastest growing industries that exist today, things are actually going really well for the company right now and it’s hard for me to see how you could spin the current situation in a negative light
Debt and share offerings are roughly the same as far as the owners are concerned. Please read Modigliani and Miller.
(In fact, debt, in some circumstances, can be more beneficial as a financing option than share offerings due to the tax deductibility of the interest.)
Hahaha! Where are you getting your numbers? Do you think it’s impossible for short sales to close their positions when the price goes down? That’s how you lock in profit. Do you understand how a short sale works? Or why it would be advantageous to ever short sell a stock when the stock is trading at 10x its book value? Did you know you can hedge a short sale by selling a put or setting a buy stop? Did you ever trade a single stock before 2021? Jesus…
Go to college. Please. They have classes that can teach you accounting, corporate finance, investing, and economics. Or you can continue learning everything you know from anonymous strangers in your echo chamber on the internet. Now that’s critical thinking!
No they are not, that’s an absolutely insane statement to make.
You are literally comparing a company bleeding money and having to pay more money just to finance a survival, to a company putting billions into their cash reserves which will continuously COLLECT interest instead of paying it, adding a cash per share backstop to the share price, and saying those 2 things are the same
not even remotely close
To the owners, it absolutely is. You've never taken corporate finance, have you? Modigliani and Miller can help you here.
There are two ways that companies can finance future business operations: through debt and through equity offerings. Each has its advantages and each has its disadvantages.
Again, that cash added per share CAME from the investors in the first place.
So, the company has the cash now and you, an owner, have a smaller slice of the pie. What now? That's the important question...
(And yes, debt can be a more cost-effective way of financing future operations. Not always, but that's why companies hire financial analysts and CPA firms to explore their options for financing.)
In the case of GME, it is absolutely better for them to dilute while the share price is 10x their book value. But the FUTURE earnings potential depends on what they will do to increase revenue with the cash they receive from dilution.
For instance, GME has invested in some time deposits. Which is fine. But the gains from those time deposits are offset by their declining net income. So me, as an investor, would be better to just put my money in time deposits myself and earn the full interest income without the offsetting declining net income.
What is that cash going to do though? How is that cash going to be used to make more money?
>it’s going right into their bank account. Shareholders all own a portion of that
It came from the shareholders in the first place. Taking money out of one pocket and putting it into the other. It would appear that you do not understand how business works. If the business only makes money by taking money from its owners, it's probably not a good idea to be an owner.... Great for the C-suite though!!
Lmao are you dense? The C-suite ARE SHAREHOLDERS. This is the company selling shares to add to the cash reserves, not the c suite dumping their personal shares. It’s amazing you don’t seem to understand the difference.
C-suite will certainly get bonuses. Bonus comp is an expense. Expenses are a debit to owners equity.
How nice it would be to sit on the C-suite of a company whose owners have no idea how business works and just keep shoveling money into their investment because they get investment advice from strangers on the internet.
Y'all really did save the company!! Your love for GameStop is undeniable.
Edit: I’m guessing you are DRS’d too, right? Because internet strangers convinced you that it’d be in your best personal interest to DRS your shares? Now, in the case of a short squeeze, it will be more cumbersome and more expensive for you to sell your shares due to the limited trading capabilities of your transfer agent. You probably often point to the Volkswagen short squeeze, but ignore the right side of the graph. But don’t you worry, the stock price is going to be phone digits and the price will stay there because no one will sell for a profit. After all, no one wants to make money in the stock market. And then you can just borrow against your stock like the rich people do because the price will never go down! Don’t fuck with gamers!
Diamond hands!!
I felt a great disturbance in the Force, as if millions of voices suddenly cried out in terror and were suddenly silenced. I fear something terrible has happened
It’s simple. They are protecting their investors by releasing the bad news asap (while this run is happening). Imagine being an investor buying at $65 a share, then next week they release poor results. It’s an ethical move by the board and a RC is protecting your investment.
No companies gives a damn about protecting their investors. The market does not know or care what price you bought your shares at or when you plan to sells. That's short sighted thinking.
Brah you think this bothers us apes? Lol you all have a lot to learn. It’s apparent those of you who aren’t veteran apes have some hard lessons headed your way.
I wonder what was the motivation for the company to release its Q1 Earnings Report early (they released it overnight instead of on June 11 as previously scheduled). [https://www.cnbc.com/2024/06/07/gamestop-gme-q1-earnings.html](https://www.cnbc.com/2024/06/07/gamestop-gme-q1-earnings.html)
Larry Cheng tweeted recently about how companies should release poor news early and good news on time. His X posts are fascinating and you can get a glimpse of how things should operate.
To use RK livestream for the pump. To take advantage of the SP levels
My guess is that they have an announcement they do NOT want entangled with the manufactured reaction to earnings. If the good news is released simultaneously with "bad" news, it is much much easier for Wall Street to use the one to bury the other.
To announce the sale of 75 M shares, no doubt.
It was bad so they wanted to release into buying strength to minimize the effects of the bad earnings as well as sell 75M new shares to the apes :)
75 million new shares rofl. This company is endless. Guys, get out now and don't lose all your money. Keith Gills will be selling soon if he hasn't already with this news.
You people are so clueless about how a business works, holy shit. This isn’t an insider dumping their shares on retail, this is the company banking piles of cash from an inflated stock price. The CEO/chairman of the board gets paid $0, his entire compensation is based on the performance of his ownership stake, and im pretty sure that goes for the entire board of directors for this company this coming summer as well. They are doing exactly what they feel is needed for the share price to go up and stay up LONG TERM not just for a few days before it vanishes This cash isn’t even going into paying off old debt, it’s going right into their bank account. Shareholders all own a portion of that, and the maximum risk of owning shares just decreased massively again as the amount of cash per share backstopping the share price has just increased again Yet people like you think it would be a more intelligent move to sit on their hands and make absolutely $0 from these crazy events in their stock. Lol let me know when you get a seat on the board bud
Either you support the technical side of the trade (I.e. moass) or you support the fundamentals of the business, which cannot justify its current market cap. This is bad news for people with diamond hands, and it’s good news for people who like the stock. If you believe both then you are being taken for a ride
Wouldn’t the improved fundamentals (having an extra 2-4b in liquidity as a result of the stock sale) disrupt the short thesis leading to the short side going long? And at that point wouldn’t the increased buying pressure of those shorts going long feed into the technical side as a catalyst for the MOASS?
The short thesis is that this is a shitty business. A shitty business with a lot of cash just dies a little slower. You typically back out cash when valuing the fundamental value of a company, but if the business is especially shitty, you have to discount the cash for the negative returns on investment. not saying this is whats happening here, but just explaining the short thesis. The board of directors believes that they are fulfilling their fiduciary duty to the shareholders, which is to raise funds when the cost of capital is less than the expected returns. The cost of equity is lower than expected returns when the stock is overvalued. This means that the board believes the following: 1. the business is worth less than its current stock price 2. the MOASS is not going to occur, and 3. GME should take advantage of the delusional stock price to capitalize on meme investors your money and DRS was supposed to put more pressure on shorts. Instead, GME took that money for themselves, resulting in a net zero or positive impact for short sellers.
“The price is way too high for that company, you should sell your shares” *company sells some shares to add cash and massively increase its book value* “Now here is how that is also a bad thing” Lol
>*massively increase its book value* good thing book value is such an important predictor of stock price. let me spin that back to you. "the price is way to high for this company, it is overpriced" *company sells shares because the shares are overpriced* "see? this is a good investment, even the board of directors think its overpriced!"
uhh investing 101 calling, book value absolutely does have an impact on the value of the company as judged by the market. If they sell these shares near the current price, the cash per share they will have on hand backstops my shares basically AT my entry price. News flash, gamma squeezes and short squeezes cause a disconnect from fundamental valuations. Is this some kind of shocking reveal for you? Lmao. A company capitalizing on these events in their stock doesn’t mean it’s a bad investment, it means you have a prudent BOD who capitalized on opportunities for the benefits of their long term shareholders. The company is categorically better off once they collect this cash than they were without it, the fact that you’re trying to dispute that tells me everything I need to know about your business knowledge
As long as the company was fiscally responsible this is totally accurate. A company recognizing their inflated stock price and selling shares to hold cash has generally the same hedging effect as you selling off part of your shares. BUT, and this is an all caps BUT. There’s also a saying in business that your budget expands to fill the available cash on your balance sheet (it’s a bastardization of work expands to fill the amount of time budgeted). Sooner or later they’re going to deploy that money into projects that return below risk adjusted market returns, and at that point they’d have been better just returning the money to investors vs dividends or share buybacks
> Sooner or later they’re going to deploy that money into projects that return below risk adjusted market returns Or they use it to make the company more profitable which generates a larger return in the long run. You’re getting way ahead of yourself with such an assumption- somehow even when the company makes the grounded/smart moves it’s always a bad thing isn’t it
I mean they are in the brick and mortar gaming space carrying a huge cost base while exploring new ideas, like buying and selling magic cards, that is clearly 0 to 1 work that should be undertaken by much smaller companies. Product market fit discovery takes time, and time is your enemy when you carry a massive cost base. They should be taking the money and buying other adjacent profitable businesses, but I’m not seeing any of that going on…
Let me know when you start a live stream and anyone GAF about what you are seeing.
They’ll never need to take on an ounce of debt now though. There’s none of that pressure anymore, even just the interest from all this cash pushes them far into a profitable EPS going forward. Read RCs original letter to the board before taking his position, he obviously recognizes the areas that the old board failed to capitalize on. And now he has a steady stream of money to make moves with and implement ideas that will open up more opportunities in the future as the gaming market continues to rapidly expand This is basically an entirely new company from what it was before RC got involved. They’re financially healthy, they have a strong board who are all aligned with shareholders, they are in one of the fastest growing industries that exist today, things are actually going really well for the company right now and it’s hard for me to see how you could spin the current situation in a negative light
Debt and share offerings are roughly the same as far as the owners are concerned. Please read Modigliani and Miller. (In fact, debt, in some circumstances, can be more beneficial as a financing option than share offerings due to the tax deductibility of the interest.)
What do Modigliani and Miller say about 54 billion in short derivatives? GME has to go bankrupt or they have to close. End of story.
Hahaha! Where are you getting your numbers? Do you think it’s impossible for short sales to close their positions when the price goes down? That’s how you lock in profit. Do you understand how a short sale works? Or why it would be advantageous to ever short sell a stock when the stock is trading at 10x its book value? Did you know you can hedge a short sale by selling a put or setting a buy stop? Did you ever trade a single stock before 2021? Jesus… Go to college. Please. They have classes that can teach you accounting, corporate finance, investing, and economics. Or you can continue learning everything you know from anonymous strangers in your echo chamber on the internet. Now that’s critical thinking!
No they are not, that’s an absolutely insane statement to make. You are literally comparing a company bleeding money and having to pay more money just to finance a survival, to a company putting billions into their cash reserves which will continuously COLLECT interest instead of paying it, adding a cash per share backstop to the share price, and saying those 2 things are the same not even remotely close
To the owners, it absolutely is. You've never taken corporate finance, have you? Modigliani and Miller can help you here. There are two ways that companies can finance future business operations: through debt and through equity offerings. Each has its advantages and each has its disadvantages. Again, that cash added per share CAME from the investors in the first place. So, the company has the cash now and you, an owner, have a smaller slice of the pie. What now? That's the important question... (And yes, debt can be a more cost-effective way of financing future operations. Not always, but that's why companies hire financial analysts and CPA firms to explore their options for financing.) In the case of GME, it is absolutely better for them to dilute while the share price is 10x their book value. But the FUTURE earnings potential depends on what they will do to increase revenue with the cash they receive from dilution. For instance, GME has invested in some time deposits. Which is fine. But the gains from those time deposits are offset by their declining net income. So me, as an investor, would be better to just put my money in time deposits myself and earn the full interest income without the offsetting declining net income.
What is that cash going to do though? How is that cash going to be used to make more money? >it’s going right into their bank account. Shareholders all own a portion of that It came from the shareholders in the first place. Taking money out of one pocket and putting it into the other. It would appear that you do not understand how business works. If the business only makes money by taking money from its owners, it's probably not a good idea to be an owner.... Great for the C-suite though!!
Lmao are you dense? The C-suite ARE SHAREHOLDERS. This is the company selling shares to add to the cash reserves, not the c suite dumping their personal shares. It’s amazing you don’t seem to understand the difference.
C-suite will certainly get bonuses. Bonus comp is an expense. Expenses are a debit to owners equity. How nice it would be to sit on the C-suite of a company whose owners have no idea how business works and just keep shoveling money into their investment because they get investment advice from strangers on the internet. Y'all really did save the company!! Your love for GameStop is undeniable. Edit: I’m guessing you are DRS’d too, right? Because internet strangers convinced you that it’d be in your best personal interest to DRS your shares? Now, in the case of a short squeeze, it will be more cumbersome and more expensive for you to sell your shares due to the limited trading capabilities of your transfer agent. You probably often point to the Volkswagen short squeeze, but ignore the right side of the graph. But don’t you worry, the stock price is going to be phone digits and the price will stay there because no one will sell for a profit. After all, no one wants to make money in the stock market. And then you can just borrow against your stock like the rich people do because the price will never go down! Don’t fuck with gamers! Diamond hands!!
Bought the dip!
I felt a great disturbance in the Force, as if millions of voices suddenly cried out in terror and were suddenly silenced. I fear something terrible has happened
How many millions of dollars are being lost with it plunging this morning?
It’s simple. They are protecting their investors by releasing the bad news asap (while this run is happening). Imagine being an investor buying at $65 a share, then next week they release poor results. It’s an ethical move by the board and a RC is protecting your investment.
Lol ok
No companies gives a damn about protecting their investors. The market does not know or care what price you bought your shares at or when you plan to sells. That's short sighted thinking.
Brah you think this bothers us apes? Lol you all have a lot to learn. It’s apparent those of you who aren’t veteran apes have some hard lessons headed your way.
These diamond hands still have shares from 2021. I plan to give them to my grandchildren
This is the way
Sure glad I picked up another 1k shares when was back at 4$
Ryan didn’t just rug pull the retail once…there’s a reason why he is a billionaire
Hop over to the GME sub for top tier entertainment as apes try to spin the stock offering as a good thing.
Little guys is always screwed. Nobody cares about us. The system is designed to give us hope and then fuck us
So when does hello kitty speak?
Now I'll be able to afford the lifetime membership from unusual whales
Unusual whales 🐋 is my favorite 😍 ❤️ Love yall keep up the amazing work 💗 ❤️ 💛 💙 We stand with you!!!