Source
r/stocks•
dwpunch

[DD] Why the GME dream to have retail to fundamentally control the price is wrong.

Company Analysis

Saw a bunch of comments over at r/WSB that "WE CONTROL THE PRICE." If we say it's worth $100,000 then it is! This is misguided and I wrote up a response:

You're sort of right. Yes in theory the market could collectively decide that GME is worth $1M a share and if every owner of a share banded together and could enforce this price, a cartel on GME shares would be formed.

There's a problem with this though, first one is what actually could happen if the cartel succeeds but I'll get to that later. This requires a mechanism to enforce discipline on every single holder of GME. Right now traders can buy dips, pretend to be on the train then sell, rinse and repeat, dip and rip.

You might ask, what if the true diamond handers NEVER sell? Then eventually the question arises, when to jump off? At some point you must take a profit right? But as soon as people believe that people are jumping off, no one wants to buy it. So no one wants to be the bagholder. Since market participants are forward looking some people will sell before this event. It's a catch 22, in order to horde shares you can't sell. But to make money you have to sell at some point.

Another problem is how GME executives are likely to act when the shares become $1M or whatever you want it to be. They can issue shares because capital is basically free. They already announced this in the 10K

Since January 2021, we have been evaluating whether to increase the size of the ATM (at-the-market) Program and whether to potentially sell shares of our Class A Common Stock under the increased ATM Program during the course of fiscal 2021, primarily to fund the acceleration of our future transformation initiatives and general working capital needs.

Can you blame them? If the stock price becomes stupidly high, that's just free capital for bonus / comping high talent new hires, transforming the company towards e-commerce, etc. This creates new shares that requires the cartel to keep buying.

Posted Mar 26, 2021, 6:43 PM UTC

9161
make_more_1013•

Also in that same document that people continually conveniently forget to broadcast because it doesn’t suit their narrative

Based on our current operating plans, we believe that available cash balances, cash generated from our operating activities and net availability under our revolving credit facility will provide sufficient liquidity to fund our operations for the next 12 months as well as the foreseeable future.

I honestly don’t think the majority of people in GME think they control the price - it’s clearly bigger players than us fighting it out at this point.

As for 1 million a share - up front I don’t believe it’ll ever get that high, but they’re not saying EVERYONE will get that. If they (the shorts covering) have to fulfil orders at a rapid pace when they finally concede, is there a chance some people with ridiculously high sell limits will win big? Absolutely. Tho maybe not that big haha

25
dwpunchOP•

It's saying that there's enough cash to support existing operations, that is a statement of liquidity.

A company transformation is expensive. And the more capital you have, the easier it is.

-3†
make_more_1013•

For sure. But also if they sabotage the squeeze they’ll have several million boycotters. I really hope they aren’t stupid. If they can benefit too and there’s enough to go around? Power to the players

13
dwpunchOP•

The people who are YOLO'ing on this don't care. Those who want to be long-term holders want them to take advantage of free capital. It reduces their risk and lets them indirectly capture the craze without selling.

-12
alexkartman•

With respect this is just wrong. "Long term holders want them to take advantage of free capital"

You're literally saying that investors are happy with losing hundreds of thousands of dollars when the price tanks on an offering.

If GameStop screws over retail investors and saves hedge funds by doing an offering, then they will go out of business quickly as they will lose support of most retail investors (Myself will be one of them)

21
make_more_1013•

I don’t think either of us can comment on what every individual believes or wants. Though I would hazard a guess and say 99.999% of investors are looking forward to a squeeze

5
UlukkiPucca•

Been quicker say Shitpost & fud

20
[deleted]•

right. I do actually come here to try and find a good counterpoint DD to GME for a reality check but its always just fluff.

8
dwpunchOP•

This is FUD? What part of it do you disagree with?

-5
idontknowanyonehere1•

Who is controlling the market tho? Spoofing shares, black pooling, naked shares, 150% short?

5
dwpunchOP•

You're starting with an answer before the question.

It's not "who is controlling the market". It's "what makes you think the market is controlled to begin with?" What evidence is there?

1
idontknowanyonehere1•

Sitting, looking at the lvl 2 data with straight up 7 shares selling and buying.

Price of stock 150.

A sells 7 stocks at 149.

B buys 7 stocks at 149.

A sells 7 stocks at 148.89.

B buys 7 stocks at 148.89.

Repeat repeat repeat over and over again.

I litterally saw it with my own eyes. It's like they know people are looking at this shit.

6
[deleted]•

This is like the 10th "DD" on here how the GME narrative is wrong but doesn't have any numbers, just anecdotes.

Everybody is aware people might, and most likely will, jump off early.

Everybody knows "+1Mil or bust" is a meme. It's there to not put limits on the squeeze.

16
dwpunchOP•

So what number is realistic to you?

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[deleted]•

+1Mil or bust

lol

15
dwpunchOP•

You would think the burden of proof lies on the side with a positive claim of a giant conspiracy rather than "this is just a regular bubble / temporary cartel". 🤷‍♂️

I do respect the dedication to shitposting though 🍺. At least we get to witness perhaps the craziest and most exciting market porn in our lives. Lots of people gonna make a fuckton and lots of people gonna lose a lot.

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[deleted]•

Ok. Kidding aside. Here's a snap of my spreadsheet showing my latest sell limit. Feel free to check my math.

https://imgur.com/a/jkgAt50

11
WonderfulIngenuity95•

Incoming hate from WSB’ers.

What you say is right though. Smart people know when to sell. Everyone else who hopped on board will be the ones who don’t know when to sell, so they will hold the bag.

Long story short, be smart and have an exit strategy.

8
Hey_Hoot•

They're downvoting this shit like crazy. I'm so done with WSB. They will downvote anyone with a negative take. Their whole organization structure is to pump, bury losses, promote buying as much as possible.

Their God, is 40 million richer and takes cut off profit without saying a word anymore. He communicates with gifs and screenshot of his bank account.

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viburnum608•

“We decide what the price is!”

I decided the price was $300 and that is what I sold it for. Pull your head out of your ass.

5
tjackson_12•

Of course smart people know when to sell... but smart people are also aware when the price is being deflated artificially to cause panic. They want us to fear the stock is just going to plummet to the ground and be worthless.. when we say the stock is worth 10 million per share we are sending that panic right back at them.

2
[deleted]•

Yeah you don’t know much bud

7
dwpunchOP•

Ok, so let me guess I'm going to ask what price should apes HODL to. And you're going to say "stfu and sit down, when I'm rich and I tell you it's okay to sell."

1
[deleted]•

Also, in response to this: Apes don’t tell other apes what to do. You’d know that, if you were an ape 😸

3
dwpunchOP•

No one's telling you what to do. Unlike you, manipulating everyone BUY BUY BUY HODL HODL HODL, not a single part of my post says "sell".

In fact, if you read some of my comments you'd see that I believe you can make BANK on this stock. I have taken both short and long positions, I actually have a small long position right now. See here:

https://imgur.com/a/4JQUUVm

What you don't see is that YOU are the shill spreading lies and potentially destroying people's lives. I am merely providing publicly available information and my reasoning, logic for my view of GME. I believe that talking about my investment ideas clarifies my thinking and by sharing it, it allows for corrections to be made.

3
[deleted]•

You want hug? You okie?

2
idontknowanyonehere1•

Issue more shares and lose your new fan base? Not happening.

6
dwpunchOP•

Also, can you please explain to me what a "fan base" is for a public company. Is that customers in their stores or investors?

Because if you look up their holders it's all investment banks and HFs.

https://finance.yahoo.com/quote/GME/holders?p=GME

Retail makes up like 1% of investors.

0
idontknowanyonehere1•

Like blackrock who holds 8 percent of all gme shares? Now ask yourself this, why would a hedgefund that mostly deals with oil want to invest in an old used up gamestore?

5
dwpunchOP•

https://finance.yahoo.com/quote/GME/holders?p=GME

It's 13% and there's a million reasons. It's making them money from when they bought it. Relationships with asset managers. Or as is often said they just "like the stonk". Are you suggesting these numbers are fabricated?

1
idontknowanyonehere1•

Oh shit it went up????

Hahahahahaha.

How about a hedgefund war?

3
dwpunchOP•

They literally said it in their 10K they are looking into it.

-1†
idontknowanyonehere1•

They can say it all they want. Doesn't mean they are going to do it. Lol. If they issue more shares before the squeeze, they will lose their entire fan base. For sure bankruptcy in the future of this company.

7
dwpunchOP•

But if the GME cartel succeeds in driving price ever higher completely ignoring all fundamentals, then surely it makes sense to issue at least some shares? I mean it seems to have escaped the notice of reddit that this was even in their 10K.

Also Why wouldn't you, it's free capital. Especially if most of your holders are traditional funds and banks, and you have their support. Retail makes up like 1% of GME.

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idontknowanyonehere1•

If ryan cohen is on twitter releasing gifs of a bear getting high while he is taking over gamestop, what do you think he is ganna do? A, support his rabbid fan base. B, open up more shares and lose it all.

5
[deleted]•

You don’t know dick. Ryan Cohen is all about his customers. Go away

2
Chevalusse•

retail owns 7.49% of gme. data from bloomberg terminal. instititional holding is 110%. Came here for a reality check but it looks like you don't really know what you are talking about.

Good read anyways

1
[deleted]•

No, they didn’t.

5
dwpunchOP•

Since January 2021, we have been evaluating whether to increase the size of the ATM (at-the-market) Program and whether to potentially sell shares of our Class A Common Stock under the increased ATM Program during the course of fiscal 2021, primarily to fund the acceleration of our future transformation initiatives and general working capital needs.

Verbatim, 10K.

1
OverwatchShake•

This would only be the case when a hedgefund with a monstrous short position on GME is forced to close all their positions at once, triggering a huge short squeeze. Gamestop could be upwards of 500% short right now. If that is correct, individual members, heck a whole platoon of them losing discipline and selling during the squeeze wouldn't matter one bit, as they need to buy the entire float multiple times.

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[deleted]•

[deleted]

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[deleted]•

[deleted]

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[deleted]•

[deleted]

7
Chevalusse•

You're comments were really helpful. I was thinking about the HF killing cohen or shit like that buts wow, that would be a real mess

1
[deleted]•

[removed]

1
dwpunchOP•

What makes you think they didn't take a loss and then made tons of money on the volatility? In fact the massive decline in SI from Jan / Feb indicates most shorts have indeed unwound their positions.

-2
ChefStamos•

Aren't GME posts banned on this sub? Why is this one allowed?

3
Chevalusse•

Not cool to remove gme posts. It's the only place we can have some unbiased opinion, or at least biased on the opposite side

1
Squezeplay•

Could GME issue more shares to take advantage of their stock price? Not sure about that, since the whole idea, at least from the GME people, is that its a short squeeze. So you would think issuing shares would destroy that narrative. It would probably feel like a betrayal to the GME holders. But GME has a brand name now of sorts as a go to yolo play. So maybe it will stay high for a while regardless. The stock is their product now.

1†
dwpunchOP•

They already announced that it's being explored. Directly from the 10K.

At some point, you have to take the free money on the table. If you start getting $1M / share hypothetically you could literally start bringing the brightest business minds in the world to your company.

4
SlimJesus08•

They implied the short interest is >100% in their earnings report. Ryan Cohen is tweeting subliminally about it. I think they would rather issue the 100 million in $ worth of shares when the squeeze is at its peak so that it wouldn’t increase the number of outstanding shares significantly, and that’s why they haven’t done it yet. If this thing works out as it should GameStop will have a lot of life long customers with a lot of money.

2
[deleted]•

[removed]

1
Squezeplay•

I don't know, didn't Hertz try to issue shares during their hype and the SEC stopped them? The question of whether it can get to $1 million or w/e, of course not at least in the short term, once people are up 10x then there is going to be a lot of selling. It may be able to get there long term but the chance of more shares being issues increases the longer the price stays up.

1
dwpunchOP•

Currently nothing is stopping GME from trying to tap their at-the-market program. Company transformations are expensive and the more free money you have the better.

Also issuing shares doesn't hurt the so-called "squeeze" since the investor riding this train doesn't even think ahead enough about things like this.

1
Stock_Padawan•

I would imagine issuing a million new shares wouldn’t put much of a dent in the squeeze. From what I’ve seen, it looks like institutions are reporting somewhere around 120-140 million owned shares, on an available float of 50ish million.

1
but-this-one-is-mine•

Not gonna argue with you just check out r/GME

The shorts are the bagholders they still in denial phase

1†
dwpunchOP•

I have, and it's an echo chamber filled with dangerous rhetoric that will likely destroy lives in the process.

Much of the so called solid research is more flimsy than a house of graham crackers that a 4 yo glued together with honey.

17
Xin_shill•

Thx for the concern trolling for the small investor. The hedgies manipulate the market destroy lives daily and sleep well at night. The vast majority of investors are investing what they are comfortable with and for the long term, and there are plenty of warnings to not throw your life savings at it, but people are going to people. If it wasn't that, then it would be some other options trading that would take all their money. Buying shares though won't be a total loss for them either way, as there is plenty of value in the company and a bright future.

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dwpunchOP•

No question, they do. Most of them are assholes. But it doesn't change what I am saying and if you think that a large number of people aren't profiting off this you are wrong. It is way beyond shitadel at this point.

Look part of the reason I post this is also to help clarify my own thinking as well. It's not so much a golden heart or anything. But also I wanted to make it into the post because every time you say anything about GME you're a shill. So at least I can save this here and point to this if I feel like I'm being trolled.

4
AWilsonFTM•

I agree. I’ve seen so much rubbish spoken about it because it has become cult-like. There is no genuine discussion on the business or the stock anymore. My view is that it is a failing business, places like Amazon, the move to cloud gaming from Microsoft, Amazon, Google and Sony will come. Cloud computing will also hurt them. That is the direction of travel and cannot be denied.

You cannot get away with shorting a stock so much and is likely now within Hedge funds risk models to not go so far. It’s hard to get a read on this stock now. It would seem HF still short it because it will absolutely tank, and Retail will continue to pump the stock. This could go on for a good while yet.

5
Hey_Hoot•

Fuck them. I'm happy to see these idiots bleed from their greedy pyramid scheme. This is a pump and dump always was.

-3†
but-this-one-is-mine•

It has substance, your post is fluff

-4†
dwpunchOP•

So to conclude that, surely you can stand on your own two legs and didn't bet money without understanding it yourself yea? You can point me to something that is solid.

6
but-this-one-is-mine•

The only solids are the artificial price drops on 1/28 and 3/10. According to Bloomberg terminal updates by several people, institutions hold over 100% of shares and retail ownership keeps increasing. Those drops are fake and no one is selling.

-4
[deleted]•

[deleted]

1
dwpunchOP•

I guess being in your 30's and a kid puts you in the boomer crowd. Oh well's can't do shit about that.

1
Durumbuzafeju•

The whole idea is stupid from the beginning. In order for a stock to be worth a million dollars, someone has to buy it for that exorbitant sum of money. This short squeze sounds nice, but all the hedge funds will be bankrupt long before the can pay a million per share for these papers. And that is the end of the game. Theoretically stock price can go up to infinity but in reality only until the shorters go bankrupt. At that point it will loose all its value.

-5
potatosquire•

The DTCC is on the hook if any of their members go bust, and the US government is ultimately on the hook to stop the DTCC collapsing.

7
Durumbuzafeju•

And they pay automatically? Or with some kind of delay?

1
potatosquire•

Cash settlement for share trades is not instant, they have 2 days to find the money. As I understand it, the underlying brokers/hedgies will write cheques they can't afford to pay, then leave the bill with the DTCC to deal with.

3
Durumbuzafeju•

So a stock price of one million dollars would not just bankrupt the stock market, but possibly the US economy too? And people knowingly buy this?

0
dwpunchOP•

Or you know, they easily cover and just switch sides making money on the volatility. Either way the whole idea that they are "stuck" holding short positions is silly.

1
Crazyfishtaco21•

Do you work for citadel?

-13
dwpunchOP•

I don't if you want me to PM you my personal details I can. We can zoom if you like.

But let's say I was a shill. Does it change the content of what I am saying?

9
Crazyfishtaco21•

You’re completely missing the point that short sellers will be forced to buy back at the price rises and they are margin called during the squeeze

-8
dwpunchOP•

But this is completely unfounded conspiracy theory. No one has the complete picture but none of the actual snapshots of share availability (iborrow, fidelity, FINRA, etc.) indicate the extraordinary short interest that existed in Jan / Feb.

They often conflict and are impartial views at best. If anything when one is high, often the others are low or vice versa. In any case the only reasonable conclusion is that this thing is way bigger than one single monolith Illuminati. There are whales on both sides and average joes on both sides. Some days shorts get screwed, some days longs get screwed. Simple as that.

Hell I was short Monday and closed out Wednesday morning, now I have a small long position. There isn't some magic man with the keys to "shorting shares" castle. Anyone can do it cheaply and get in / out.

10
Trisolaran_arbitrage•

I am more concerned at this point that the pro-GME arguments are now being pushed by gasp... hedge funds! We know HFs were all over WSB pages going back to February 2020 when Bloomberg Businessweek had WSB on the cover. Do people not think that hedge funds reversed course and starting betting with the stock?

4
Crazyfishtaco21•

Alright well you can write it off as a conspiracy but there are countless individuals doing solid research and dd everyday and it’s very obvious the short levels are obscenely high and misrepresented. I don’t think your opinion is going to change based on what I can say at this point so we’ll just have to wait and see what happens.

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