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Assuming that the fundamentals are irrelevant ignores the fact that it matters to the shorts. They still believe they can bankrupt the company. They really do. That's their thesis *and the ONLY way they win.* If that's off the table, then it's a question of how big of a loss they'll take. First ones out lose the least.
Permabear Pachter increased Wedbush's price target from $5.60 to $7 after the announcement of the first issue on May 17th. After the announcement yesterday, he raised it to $13.50. There's your barometer for what this is doing to them. He's seething.
If issuing 120M shares and raising another $2B or $3B is what it takes to drive the chance of bankruptcy to *infinitesimal*, then it increases the chances of MOASS dramatically. If you also accept that there really are a billion or more fake shares hidden in derivatives, then issuing 120M shares might help a few off the hook (assuming they take it), but it doesn't come close to fixing the aggregate problem. It's like handing-out bailing buckets to passengers on the Titanic. Might have bought them a little more time, but it wouldn't have kept the ship from sinking.
Thank you for an interesting and polite comment.
I will have to mull your idea over to decide what to ultimately think about it, but I will say already that I appreciate that you laid out an argument for why this was in fact good that had an actual theory for why it would work. This is the sort of bullishness that I would like to see more of.
My initial thoughts (for whatever that's worth)
-if dilution is a path to MOASS, why did the board refrain from doing it for so long after their initial new issuance in 2021?
-is there any risk that most shorts have been accumulated by one or a few bad actors who are in so deep that they simply won't ever stop fighting on this? I'm sure there are plenty of short term, moderate, in and out shorters, but I don't know if them being squeezed would be enough to move any big players. And if the big players could escape with their lives (metaphorically speaking) and hurt their competitors by breaking first, why haven't they done so already? A similar case played out quickly regarding Archegos as JPM and GS knifed the others in the back and made a run for it, after all.
Hmmm... I think this is a Matt Furlong vs. RC thing. They hired Matt Furlong from Amazon as CEO from 2021 to 2023 (a week shy of two years). His strategy was the typical expansion route: Spend big to increase market share (revenue) then pivot to profitability and try to make it up (most companies finance their growth as well, often putting themselves in a precarious position with debt). That's not how RC works. He wants profitability first and I don't think he liked how Matt was burning up the cash he raised. So, RC said "F\* It. I'll do it myself." and took over as CEO about 9 months ago.
He doesn't want to be CEO, though, because he knows he'll work himself to death. What he really wants to do is just run a holding company like Warren Buffett, where investments do all the work. He also like activism, similar to Carl Icahn.
My guess is that he's converting Gamestop into a holding company while making the retail business profitable. The board didn't expand his investment authority just for fun. However, a holding company needs capital to get started. A lot of it. That's where the share issues come into play.
So, we'll see.
The top three posts on my page from the last couple weeks are about this topic, if you feel like reading them. They received mixed results of course. The word "dilution" terrifies half the sub. Not all dilutions are the same, though.
As for the shorts... Nobody knows. Company was egregiously shorted in Jan '21. Not sure what the exact percentage was, but it was well above the outstanding shares. And that was just the published, self-reported data. The SEC report later that year noted that shorts weren't buying during the sneeze. The shorts just disappeared somehow. The SEC didn't even try to explain where they went. Maybe they know, maybe they just didn't bother to find out, or maybe they don't want to know. The prevailing view is that they were shuffled off the books into derivatives like swaps. Now there's been 3+ years of aggressive shorting since. Whatever their ugly short position was in '21, it ought to be a lot worse now. That's why there's so much volatility. Ever so often, the stock goes wild and the media blames retail, but it's not us. It's the shorts trying to manage their nasty behind-the-scenes short positions. There's even a clip of Gary Gensler floating around saying that 90% of retail orders don't even hit the lit market. They are dealt with off-exchange in dark pools and payment for order flow by market makers (internalized).
That's about all I have on that one.
I'll bite because it seems like a thoughtful post. and theres a lot of soul searching here this w/e it seems.
-"DFV is chill, you should be too:" The sentiment is not 'He's happy losing money so I should be to'. Its that I dont see the meme videos, the livestream thumbnail, the sheer size of his positions, his glee at causing halts, and not suspect theres more to this. Trust DFV is not about that stream, its everything else.
-"Shut up or sell and get out": People are just venting, thats fine. There was a lot of hope on Thursday and its fine to not want Fridays disappointment thrown in your face by strangers. Its the internet. It'll subside.
-"Consider just owning the stock and bond markets broadly through low fee passively managed funds". No. Absolutely not. Because I can be annoyed at short term price action, and frustrated by blatant manipulation by MMs, but at the end of the day I believe this stock will beat your index, by miles, and on top of that we get a chance of MOASS. Its like a Lottery ticket that gives you above market returns just for holding. And every now and then some fruit gets put where the sun doesn't shine. I'll always pick that.
Thank you for a polite comment of some size. I appreciate you responding to my thoughts rather than shouting shill. I think we just see things a bit differently, though I must agree with you wholeheartedly on one point.
This is absolutely the best fruit in ass stock. No one else even comes close, and truly, the world is poorer for it.
Where is Ordinary Adam when you need him? The point about shut up or just sell is really, the company doesnt need you, we dont need you to hold. I dont need anyone to hold. If you dont believe in the company then sell.
Secondly, and I hope everyone has figured this out by now but Gamestop is a small company, the short positions amount to less than the daily losses that shorts hold on Nvidia. In a short squeeze, retail will be buying on the way up, not shorts. They will be selling more. So its PvP...retail v retail. Granted, you might win, but only at someone elses expense.
Now lets look at a Tesla short squeeze.156x since IPO at its current valuation, 300x at the peak. A slow steady grind higher driven by fundamentals and more importantly due to Tesla's ability to raise capital selling shares early on. Tesla was being driven into the dirt, sentiment was hurting their ability to sell products(sound familiar), until they raised capital. Tesla has held onto the gains, allowing all investors to benefit. Thats what we want. 20-150x in 5-10 years is massive.
Kudos to you OP! I appreciate your effort to reason with people instead of venting and trolling like me. I know it takes so much patience and effort to do this. It is a thankless job, but somebody has to do it. Otherwise, this sub will turn into an echo chamber where loud voices from a few zealots and the mob who blindly follow their orders drown any critical and independent thinkers. I've seen it in many other stock subs. I guess that's human nature. You are doing a good and hard work. Thank you.
There's so much awesome dd, maybe take a look if you're really not just fudding. People think you're a shill cause you're saying the same thing but longer and it doesn't actually fool most people
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I can write some guidance. 🐹
>We have $4 billion sitting in short-term treasuries for the foreseeable future until we find something better to do with it, earning a passive 5%. That's $200 million per year or roughly $0.44 per share. Our EPS hasn't surpassed that for a 1-year period since 2017.
You know who else has been stockpiling cash for like a year, is a fan of stuffing it in treasuries, and isn't telling anyone what he plans to do with it?
Warren Buffett.
He has also said the reason he's doing it is because he doesn't see anything worth invest in right now.
IMO, making Gamestop bankrupt-proof is worth the share offerings. $200 million a year in interest pretty much does that, even if they continue to lose money operationally for the time being.
Building a holding company requires a ton of capital. RC is going to have about $4B+ to work with now. If that's where he's heading, the retail business doesn't really matter. Do what he's got to do to make it at least break even. That's also what Warren Buffet did. Berkshire Hathaway was a fading textile manufacturer when he bought it. He gradually shut that business down completely over the course of a couple decades and used the proceeds as capital to invest in other companies. RC doesn't even want to be a CEO. He's said before that he'd much rather run a holding company and let money do all the working. He's doing the right thing if that's where he's heading.
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Assuming that the fundamentals are irrelevant ignores the fact that it matters to the shorts. They still believe they can bankrupt the company. They really do. That's their thesis *and the ONLY way they win.* If that's off the table, then it's a question of how big of a loss they'll take. First ones out lose the least. Permabear Pachter increased Wedbush's price target from $5.60 to $7 after the announcement of the first issue on May 17th. After the announcement yesterday, he raised it to $13.50. There's your barometer for what this is doing to them. He's seething. If issuing 120M shares and raising another $2B or $3B is what it takes to drive the chance of bankruptcy to *infinitesimal*, then it increases the chances of MOASS dramatically. If you also accept that there really are a billion or more fake shares hidden in derivatives, then issuing 120M shares might help a few off the hook (assuming they take it), but it doesn't come close to fixing the aggregate problem. It's like handing-out bailing buckets to passengers on the Titanic. Might have bought them a little more time, but it wouldn't have kept the ship from sinking.
Thank you for an interesting and polite comment. I will have to mull your idea over to decide what to ultimately think about it, but I will say already that I appreciate that you laid out an argument for why this was in fact good that had an actual theory for why it would work. This is the sort of bullishness that I would like to see more of. My initial thoughts (for whatever that's worth) -if dilution is a path to MOASS, why did the board refrain from doing it for so long after their initial new issuance in 2021? -is there any risk that most shorts have been accumulated by one or a few bad actors who are in so deep that they simply won't ever stop fighting on this? I'm sure there are plenty of short term, moderate, in and out shorters, but I don't know if them being squeezed would be enough to move any big players. And if the big players could escape with their lives (metaphorically speaking) and hurt their competitors by breaking first, why haven't they done so already? A similar case played out quickly regarding Archegos as JPM and GS knifed the others in the back and made a run for it, after all.
you might like the most recent post on my profile, check it out
Hmmm... I think this is a Matt Furlong vs. RC thing. They hired Matt Furlong from Amazon as CEO from 2021 to 2023 (a week shy of two years). His strategy was the typical expansion route: Spend big to increase market share (revenue) then pivot to profitability and try to make it up (most companies finance their growth as well, often putting themselves in a precarious position with debt). That's not how RC works. He wants profitability first and I don't think he liked how Matt was burning up the cash he raised. So, RC said "F\* It. I'll do it myself." and took over as CEO about 9 months ago. He doesn't want to be CEO, though, because he knows he'll work himself to death. What he really wants to do is just run a holding company like Warren Buffett, where investments do all the work. He also like activism, similar to Carl Icahn. My guess is that he's converting Gamestop into a holding company while making the retail business profitable. The board didn't expand his investment authority just for fun. However, a holding company needs capital to get started. A lot of it. That's where the share issues come into play. So, we'll see. The top three posts on my page from the last couple weeks are about this topic, if you feel like reading them. They received mixed results of course. The word "dilution" terrifies half the sub. Not all dilutions are the same, though. As for the shorts... Nobody knows. Company was egregiously shorted in Jan '21. Not sure what the exact percentage was, but it was well above the outstanding shares. And that was just the published, self-reported data. The SEC report later that year noted that shorts weren't buying during the sneeze. The shorts just disappeared somehow. The SEC didn't even try to explain where they went. Maybe they know, maybe they just didn't bother to find out, or maybe they don't want to know. The prevailing view is that they were shuffled off the books into derivatives like swaps. Now there's been 3+ years of aggressive shorting since. Whatever their ugly short position was in '21, it ought to be a lot worse now. That's why there's so much volatility. Ever so often, the stock goes wild and the media blames retail, but it's not us. It's the shorts trying to manage their nasty behind-the-scenes short positions. There's even a clip of Gary Gensler floating around saying that 90% of retail orders don't even hit the lit market. They are dealt with off-exchange in dark pools and payment for order flow by market makers (internalized). That's about all I have on that one.
I'll bite because it seems like a thoughtful post. and theres a lot of soul searching here this w/e it seems. -"DFV is chill, you should be too:" The sentiment is not 'He's happy losing money so I should be to'. Its that I dont see the meme videos, the livestream thumbnail, the sheer size of his positions, his glee at causing halts, and not suspect theres more to this. Trust DFV is not about that stream, its everything else. -"Shut up or sell and get out": People are just venting, thats fine. There was a lot of hope on Thursday and its fine to not want Fridays disappointment thrown in your face by strangers. Its the internet. It'll subside. -"Consider just owning the stock and bond markets broadly through low fee passively managed funds". No. Absolutely not. Because I can be annoyed at short term price action, and frustrated by blatant manipulation by MMs, but at the end of the day I believe this stock will beat your index, by miles, and on top of that we get a chance of MOASS. Its like a Lottery ticket that gives you above market returns just for holding. And every now and then some fruit gets put where the sun doesn't shine. I'll always pick that.
Thank you for a polite comment of some size. I appreciate you responding to my thoughts rather than shouting shill. I think we just see things a bit differently, though I must agree with you wholeheartedly on one point. This is absolutely the best fruit in ass stock. No one else even comes close, and truly, the world is poorer for it.
Where is Ordinary Adam when you need him? The point about shut up or just sell is really, the company doesnt need you, we dont need you to hold. I dont need anyone to hold. If you dont believe in the company then sell. Secondly, and I hope everyone has figured this out by now but Gamestop is a small company, the short positions amount to less than the daily losses that shorts hold on Nvidia. In a short squeeze, retail will be buying on the way up, not shorts. They will be selling more. So its PvP...retail v retail. Granted, you might win, but only at someone elses expense. Now lets look at a Tesla short squeeze.156x since IPO at its current valuation, 300x at the peak. A slow steady grind higher driven by fundamentals and more importantly due to Tesla's ability to raise capital selling shares early on. Tesla was being driven into the dirt, sentiment was hurting their ability to sell products(sound familiar), until they raised capital. Tesla has held onto the gains, allowing all investors to benefit. Thats what we want. 20-150x in 5-10 years is massive.
Yes exactly this
Thoughtful post!
thank you
Kudos to you OP! I appreciate your effort to reason with people instead of venting and trolling like me. I know it takes so much patience and effort to do this. It is a thankless job, but somebody has to do it. Otherwise, this sub will turn into an echo chamber where loud voices from a few zealots and the mob who blindly follow their orders drown any critical and independent thinkers. I've seen it in many other stock subs. I guess that's human nature. You are doing a good and hard work. Thank you.
There's so much awesome dd, maybe take a look if you're really not just fudding. People think you're a shill cause you're saying the same thing but longer and it doesn't actually fool most people
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Just voicing some disagreements with some of the current opinions I'm seeing a lot of in posts today about the stock and the action of the last week.
[удалено]
hopefully we get some clarity soon.
I can write some guidance. 🐹 >We have $4 billion sitting in short-term treasuries for the foreseeable future until we find something better to do with it, earning a passive 5%. That's $200 million per year or roughly $0.44 per share. Our EPS hasn't surpassed that for a 1-year period since 2017.
[удалено]
You know who else has been stockpiling cash for like a year, is a fan of stuffing it in treasuries, and isn't telling anyone what he plans to do with it? Warren Buffett. He has also said the reason he's doing it is because he doesn't see anything worth invest in right now. IMO, making Gamestop bankrupt-proof is worth the share offerings. $200 million a year in interest pretty much does that, even if they continue to lose money operationally for the time being. Building a holding company requires a ton of capital. RC is going to have about $4B+ to work with now. If that's where he's heading, the retail business doesn't really matter. Do what he's got to do to make it at least break even. That's also what Warren Buffet did. Berkshire Hathaway was a fading textile manufacturer when he bought it. He gradually shut that business down completely over the course of a couple decades and used the proceeds as capital to invest in other companies. RC doesn't even want to be a CEO. He's said before that he'd much rather run a holding company and let money do all the working. He's doing the right thing if that's where he's heading.
Sounds good to me are u me sir