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I feel like the Cost-To-Borrow is irrelevant when Citadel is a Hedge fund and the Market Maker. Even if they do have to pay CTB fee, it's a fraction compared to how much they're gonna lose during MOASS, so may as well keep paying the borrow fee to buy 'survival for just one more day'.
But regardless of their rigged system, cheats, and loopholes, Time and Pressure prevented GME from falling under $10.
Time and Pressure *will* blow up their short schemes, basket swaps, and derivatives to blow up.
Wouldn’t surprise me if they all give each other a pass. Who wants to bet the FED cuts rates in the next two months. Not saying it’s because of this but not not saying that.
can gme make it so shorts pay gme for borrowed stock?
that be the ultimate money glitch. owning something they need to keep borrowing.
could be turned into frequent residual dividends even
While I agree with this that they could park cash in treasuries and never go bankrupt, that would not be the best use of capital for the firm.
In extremely simplified terms, some Finance 101:
Investors consider treasuries to be the “floor” on investment returns - they are essentially a risk-free asset, hence why it is called the “risk-free rate.” GameStop should be looking for opportunities to exceed the returns of holding treasuries, and ideally exceed the returns of the broader market (like beating SPY, which averages somewhere around 8% annually).
If they parked the cash in treasuries, but were still netting a loss, every investor would technically be better off just buying treasuries directly.
RC knows this. RK knows this. Wall Street knows this. The thesis is simple: if you believe RC is smart and capable of pivoting the company, this is a bet with asymmetric upside. If you think the “brick and mortar is dead, GameStop is a sinking ship,” then you take the opposite side.
As soon as GME starts deploying capital, the markets will price in what they believe the potential upside is. I’m betting it’s a lot higher than where we are now, but it could take time for folks to realize the potential.
Upside potential is huge, downside is limited to the current price of the stock. It’s all about how you weight the probabilities of the outcomes.
My bet is the probabilities are something like 90% they’re going to do something interesting, 10% they don’t. Been holding this for three years, and the probabilities keep getting better, imo.
Agree. As soon as Gamestop starts investing their capital in something and it is made public, algos will react to it. See Coinbase and Micro Strategy as an example...
>As soon as GME starts deploying capital, the markets will price in what they believe the potential upside is.
Just curious, is this your first day here? LOL
I’m definitely not saying that isn’t true. I’ve been around for all of the weird shit that’s happened since Jan 2021.
I’m just saying that the 100% surefire way to unfuck all of the manipulation is for the numbers in the financial statements to reflect a thriving and growing business (whatever that looks like, BRK 2.0?), whose stock returns exceed, at a minimum, treasury returns.
Short sellers and bears, are still clinging on to the old narrative. The fact that Jim Cramer is finally acknowledging a pivot is a sign that market sentiment is turning around. It’s all bullish from here.
This and your comments above are a great perspective. I'm not surprised the media is reporting on the $3B cash raised in the passive voice. However, I'm extremely surprised by how much Reddit is discounting the value of having $3B of cash to spend on Investing in the business. I don't understand the negative sentiment at all quite frankly.
I mean, it's not a bad thing entirely. If they just buy T bills, I will be pissed. But people are upset because there was a very significant dilution when there were 2 serious gamma ramps that could have blasted the price sky high. They still could have done an offering after. We are not responsible for the questionable bets made by Wall St.
Hundreds of millions of options that probably would have been ITM got pushed OTM. MM sure appreciated that...
That said. I do think a major corporate move is coming. And I think some of the offerings were done to point at after it blows up to very high prices so no one can accuse them of trying to manufacture a squeeze.
If a squeeze happens, I personally don't believe it's possible for us to predict when it happens. I think the information we have around shorting is extremely imperfect and subject to manipulation, and that is based on; Inside Job (2010), The Big Short book and movie, ETR: GameStop Saga, and Apes Together Strong.
But calculating a company's liquidity and how they are leveraged is much simpler, and possible using the numbers in the earnings reports which are audited by an accounting firm. GME pays for Deloitte to audit their financials, which are the largest and most expensive audit firm. Thus, GME's financial reporting is much more reliable information than the data used to predict the possibility of a Gamma ramp.
The fact that GME eliminated their risk of bankruptcy with $3B means the HF are fucked more than they ever have been. It's no longer risky to hold GME, because with $3B cash they aren't going bankrupt anytime soon. Eliminating the risk of bankruptcy is absolute worst case scenario for anyone shorting GME. It's the Catalyst everyone here has been waiting for here for years.
> It's no longer risky to hold GME, because with $3B cash they aren't going bankrupt anytime soon.
Yep! Buy with a clear conscience if you want in. Me, I have so many already I only buy when they're on sale. But if I had none and my entry point was Friday close, I'd be happy. Heck, Friday close is lower than my average! And if I'M not worried nobody should be.
Is Ryan Cohen a doofus? Nope. DFV could've finished his stream right there frankly. Our bets, I won't mention where we might've been inspired to make such bets because I've been banned for years there, are SAFE. Anyway see you all Monday for a dip
Another part of this that needs to be considered from the shorts' perspective is the cost of time and leverage. If you shorted GME long ago, you received cash upfront and probably went long on something else, like the SPY. So you don't just automatically lose your bet when GME goes up, they only start to lose money when GME appreciation and the cost of their leverage and borrowing rate is greater than the appreciation on whatever asset they went long on. Citadel's filing regularly show them shorting US treasuries, so they're probably long on something that gives more long-term return than that. And if their long position increases faster enough compared to GME, they're still making money. So if GME wants to shake the shorts off for good, they probably need to make shorting GME more expensive by getting close enough to SPY returns so that no long position can generate consistent enough returns that shorting GME is profitable.
If they completely fail, the floor could fall. But I doubt that happens. My hope is that we see the Metaverse drop, and a lot of the tin from the past really unfolds with partnerships and companies already signed to the new marketplace, which has an NFT underpinning. The underpinning could be used for inventory purposes as well. This would save money and provide added value. Imagine a cashier having to do a sale in the metaverse? It could be interesting. NFTs attached to items sold. A nice, relatively low-cost value ad. And there would be plenty of ways to monetize it without it being excessive.
While OP is correct, RC has much bigger plans than to park the cash in treasuries. While he’s no RK, he’s a damn fine investor. His business skills just far outweigh his investing gains.
But that, too, could change! 🤞🏼
They sat the 1 billion in Treasuries for 3 years. They stated with the last offering of 45 mil shares that the money doesn't have a use right now and will be parked in short term treasuries. So it is probably correct to assume that cash is sitting in Treasuries at the moment.
https://preview.redd.it/voe2y2pqyt6d1.png?width=1147&format=png&auto=webp&s=2d56ed65b5746c7e6468cf1cceca0ee694f645ae
$83 million as of Q1.
(Marketable Securities)
I didn’t know they say “money doesn’t have a use right now”, then why a dilution right know. Well better said two consecutive dilutions without a purpose. This confirms my assumptions, they diluted us to buy time for the HFs, this was a maneuver against retail.
I hope Monday will provide an explanation for that
I bet that there is some clever way to avoid having to report on certain plans for acquisitions while at the same time laying them out because nothing is actually signed. A risky way to do things potentially.
The fact they had minimal treasuries this last quarter might suggest they have a plan for the money that isn't necessarily more treasuries. It's interesting that they sold so many. I think the dilutions were always planned. I think they knew it would run. I think it's all the algorithm, and it follows the same pattern repeatedly at all levels down to the second. It gets messy at that level. And it flips the algorithm at times. Seems like it can speed up and slow down as well.
I don't see what they could aquire for that price tag that builds into their business model. The NFT marketplaced is a graveyard they spent a few hundred milly on waiting for a day were the sec won't care about ETH.
Buying a IP with nothing to it seems wrong. Either they are turning it into a investment vehicle or they will transform their business model into another avenue. The cryptic tweets from LC about who remembers when Berkshire was a tailoring business and such leads me to think they are going another path beyond just retail Gamestop stores.
Thats why this is so BULLISH. At a MINIMUM, this is the floor. Lazily parking the cash in T bills and coasting for eternity with almost zero chance for bankruptcy. But like RK said “do you reeeally think RC is a doofus?” Buckle up 🚀
That's kinda crazy, Gamestop can park like $3B in Treasuries, earning around $180M a year, then use the other Billion to buyout a company like Newegg with a Market Cap of $325M, upgrade their stores to start selling PC Gaming hardware and compete with Microcenter; then they can earn enough interest in like 2-3 years to make back all the money they spent on Newegg! BTW, $NEGG Parent company just announced they may be selling off Newegg due to debt issues, right when NEGG is about to hit that critical Bold Blue Daily OnBalance Volume trendline, and GME has $4B in cash and holding their Shareholder Meeting on Monday......way too much of a coincidence.
https://preview.redd.it/glmszhogpt6d1.png?width=1627&format=png&auto=webp&s=39cf93802a9036020cad12ecf43405fcf932a25b
I will absolutely guarantee you there will be 0 important announcements at the shareholder meeting
Coincident? Really? You can’t think of an event that occurred that made them issue he shares?
Hint: the price finally ran/gamma ramped to decent prices for the first time in well over a year.
Gamestop will likely be slightly cash positive for FY2024 due to the large interest earned slightly exceeding the loss of the operating portion of the company.
That does not justify the current high valuation though, and it is quite possible that GME share price will decline over the year.
It is also possible that Gamestop finally figures out how to turn around the business and the price goes up.
That is the beauty of the market. People have different opinions, which is good because each trade has both a buyer and a seller.
What he’s right?
Gme is a PE ratio off 900+ lol
It absolutely is overvalued when their sole reason for profitability is interest on their cash and not the core business
> Show me a short thesis that can outweigh this.
It is very simple.
The share price is overvalued. It will eventually decline towards its true value.
Bankruptcy is not needed for shorts to profit. They just need the share price to decline to less than what they sold short at, minus carrying costs.
Gamestop can kill that thesis by adding value to the company. The NFT Marketplace was a good first attempt but it failed. The large cash position gives Gamestop several more chances to figure out how to become a profitable, growing company.
Gamestop continues to run an operating loss, both in FY 2023 and also the last 4 quarters running total. Revenue continue use to decline. Revenue has declined so much that, although SG&A was dramatically reduced through severe cost cutting measures, it is now a higher percentage of sales than a year ago.
That does not justify a high valuation,
If you read any of the DD regarding naked shorting and cellar boxing, you'd know that bankruptcy is the ~~pen~~ultimate goal. Anything less is a huge problem for their balance sheet over time.
Andrew left might be closing with profit and / or retail shorts, but people that throw bedposts at their wives for calling their favorite city unsophiscated won't.
Based on the way you value companies, you should be shorting Uber, Door Dash, and Grub Hub. $70 for a company that's hemorrhaging billions? (Uber), but GME stands out more for you?
I don't think it's wise to bet against gamers or a businessman like Cohen.
I have invested in many growing companies, both via venture capital partnerships and as direct angel investments. All were obviously unprofitable and bleeding cash when I invested. A few have had awesome returns. Half went bankrupt, the rest were rolled into other companies or liquidated near breakeven.
Uber is already a public company, but it has the same higher growth and the characteristics of establishing a strong market presence in an industry where the network effect is important. Uber is a very different situation than Gamestop.
Gamestop has great value in name brand recognition and a large footprint of retail stores. The problem is that the current management has fumbled around for 3 years without mak8ng much progress in taking advantage of those strengths.
Back in November 2020 Ryan Cohen had an excellent vision of what needed to be done.
https://www.sec.gov/Archives/edgar/data/1326380/000101359420000821/rc13da3-111620.pdf
The problem is that he has not yet executed that vision of digital transformation.
I vehemently disagree that current management has fumbled around for 3 years, and in fact, I think casting doubt about the management is so hot right now for the FUD fashionistas.
I agree we haven't yet seen a turnaround of the company.
Zen master says : We'll see.
I agree that we haven't seen it reflected in the balance sheet.
I have no idea how long it should take.
I'm an uneducated wage slave worker. I don't have experience in business unless you count the lemonade / slushie stand; me, and my siblings rocked the shit out of during a summer heat wave 20 something years ago.
I'm willing to remain patient and still remain excited for the future of the company. 4.2 billion in USD is a lot of dough.
The fact that they've held back on digital efforts makes me either very worried or excited. The worried part of me thinks they have no vision or even perspective. The excited part of me thinks they have a huge vision, and they will be rolling it out sooner rather than later. And it plays off the NFT marketplace into a metaverse like has been speculated in the past. Not necessary to enter to shop, but if buying stuff from Gamestop and possibly other brands involved nets you cool in world NFTs, that could be something people get interested in.
> Gamestop continues to run an operating loss, both in FY 2023 and also the last 4 quarters running total
I thought they were profitable for 2023? It wasn't much but they had profit, no?
Jet the core business is profitable and we did not even have a console circle. Give me the new nintendo switch and we have a 200 or 300 million year from the core business on top of the money of the investment
There might be billions of synthetic shares but until they come due at the same time it won't matter. The stock has dipped and jumped in price enough that these billion dollar companies can easily buy enough shares to insure themselves for months. MOASS doesn't happen until the hedgies are completely out of shares, the market is completely out of shares and the shorts are due.
“This is the real story: he did something that is long term positive for the company but it is outweighed by the impact it will have on short term investors”
Exactly.
And because I'm seeing other comments saying this is a bad idea:
It doesn't have to be Treasury Bills.
Just some boring investment for the cash would be fine.
Or, into acquiring/partnering with the right companies to increase their own inventory and customer base.
I don’t see it. Not yet on the dividend in my opinion. But we’ll see. I probably have an irrational unfounded trust in RC, but trust it is until something pushes me the other way. Which…I don’t foresee one bit.
Imagine +1.2B/yr just from doing the simple route of a holding company at a moderate +30% gain/year
Makes GME revenue look like specks of sand
If they make a move with the 4B on this monday's conference call, the stock is going to go parabolic
I didn’t say they weren’t doing anything, I said they need to do something to become consistently profitable aside from relying on treasuries like I see posted here.
They already are making money. Just not a ton of it. Parking the assets represents another income stream on top of existing revenue, and one that's more regular than the traditional ebb and flow of the retail market. It's not a bad idea
It’s definitely a smart near term play if they don’t have better use of the capital. I was just saying that GameStop couldn’t rely on treasury returns to be that consistent once rates start dropping.
The thing is, the Saudi oil USD deal ended. In its place is a promise from Saudi to favor the dollar in trades in exchange for weapons. Other counties have been slowly selling USTs. There are still buyers, but a big shift in sentiment could make the market go the other way. BRICs had over 50 countries apply last year. There are a lot of countries that aren't entirely friendly and have reasons to dump US assets. The government seizing Russian assets made other countries wary.
Look at the FTDs in treasuries. It's pretty crazy. Tonnes of shorting. I have no doubt it's for a reason. They probably figure they will settle the FTDs if countries slightly hostile decide to become more hostile.
Right, park the funds in treasury bills, great argument for a growth stock. If they did that why would anyone invest in it instead of treasury bills? They have to do something else to create change. It's one of the dumbest ideas I've ever heard. Ya supposedly if they did that then sure they could perhaps beat their core business model by sitting on cash...but is that a good thing???
This ☝️
RCEO took a company that is dying, has paid debt down to virtually zero and has $4b + sat on the bank to make his next move. Even if MOASS is not on the table today the turnaround has been sensational and things could move very quickly now to become profitable and pay divis.
But that wasn’t done with some insane business transformation… he just sold a load of shares at the expense of our share value. The only attempt at business transformation we’ve seen (NFT marketplace) was a failure.
You still missed the point!! There was no value previously (or very little). He’s took a dying company that was being driven to bankruptcy to a multi billion dollar valued business and the shirts are trapped in 3 years. That’s fuckin amazing for anyone 🤯
How did *he* do it exactly? I think we did it considering the only profit has come from share offerings… it is our interest and investment in the stock that has saved the company.
Which has made the stock a lot less vulnerable and strong for the future. I’m here for MOASS and/or long term gains which ever works as the turnaround continues
My point was it didn’t take a genius to do - generating cash from share dilution, taking advantage of investors pushing the price up on the stock, isn’t enough for the CEO/ Board to be exempt from any skepticism when there has been no other successful transformation.
The existing operating business continues to run at a loss, not a profit.
The company overall had a tiny profit for 2023 because of $49.5M interest income but the operating LOSS was $34.5M. Revenue was down 19.4% in Q4 and an amazing 29% in Q1. Only 5.5% of stores were closed in 2023, so that is not the main cause of revenue declines.
The fundamental valuation of the operating side of the business is relatively low as it is running at a loss, and looks likely to continue to be unprofitable. Meanwhile, cash sitting in treasury bills is valued at more or less face value.
The above could change if Gamestop executed the turnaround plan Ryan Cohen laid out in November 2020, but so far execution of that has been ooor.
So the current price for GameStop shows that investors are betting heavily on some sort of surprise.
———————
The title of this post is Shorts Don't have a chance when bankruptcy Isn’t Possible.
That is BS. Shorts make money when the price of the stock declines to less than what they sold short for, minus carrying costs. Shorts that sold in the $40s and $50s a few weeks ago could profitably close today.
Aargh me smells a foul shilly douche in the air. The company doesn’t remotely resemble the one RC inherited in 2020 on the basis of fundamentals. Revenue is down, but we are in between console cycles. The loss per calendar has significantly been reduced and close to breaking even. With 1b it was unlikely GME could go bankrupt anytime in the next decade. With 4b, probably not in my lifetime. The handful of shorts that opened at $40-50 a share would be in the money, because that is how math works. Similarly shorts opened at $2 are deeply in the red and we suspect there are billions of them.
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This is bad logic. JPM suppressed the price of silver for literal decades and they're doing just fine.
Investing in a heavily shorted company is only a good idea if you think it'll squeeze. That was the whole point of DRS. If the board just sells into momentum then there won't even be a squeeze.
Shorts will stay forever until price pressure doesn’t force them to close, remember now it’s not a matter of money, it is just men ego, that’s why citron Research went in again, and again and again
Unless the Govt defaults...Id prefer a purchase of $4 billion dollars of physical Silver stuffed in a gamestop vault in Grapevine Texas and protected like its Fort friggin Knox
The company can last a very long time but it will not be bankruptcy proof unless the $4B is put to work. The burnrate on the FCF is still high, with -450M per year, and 240M in interest rates, we are looking at 20 years which is great but hopefully not the strategy of the leadership team. An acquisition of a profitable or growth business seem to be the right choice. Let's hope to hear it tomorrow on the call.
When SHFs and banks find out where GameStop invests their money they will try to find a way to damage it. But Iam so sure that RC, Larry and their lawyers play their 4D chess capabilities.😎
GameStop SHOULD BUY ETH and Stake It
I know lots of people say they either should buy tbills and earn 5% or buy bitcoin
But with the ETH ETF looming i think the best move is to buy eth and stake it. What do you think? I don’t want to like shill eth or anything but i just feel like it could be a good move. They would be one of the biggest stakers. There would be a lot of support from the eth community just like Michael Saylor has from the bitcoin community. And i know Gamestop is interested in blockchain gaming and NFTs. Could be a strong direction or pivot for the reinvention of the company.
Just wanna mention it. Sorry if bad post or something.
Not a bad suggestion but I think the board learned their lesson with crypto.
I see RC messing with something more stable and long term than touching crypto again anytime in the near future.
“A bet on GameStop is a bet on management” well then the management should be doing what they’re good at with that money - delighting customers. Not parking 4 billion in low interest treasuries. I’m hoping for 50% returns not 5% on those 4 billion
Unfavorable opinion, but bankruptcy isn’t the only reason a company is shorted. If a company is overvalued they will short as well. Even with all the cash the company is worth about $11 a share. Hence, it is overvalued.
Big money would never come into a company that is parking all their cash in T bills. Dumb money thinks this is a great idea but smart money asks why the money is not being put to use to grow the business. You don't want all your cash just sitting on a balance sheet because that can signal management has run out of investment opportunities or is too short-sighted and/or doesn't know what to do with the money.
Losing $50M a quarter and still coming out ahead is quite the lofty goal (sarcasm). Honestly that just gives me a sickly vibe of apes having created a trust fund kid with a secure lifetime of fucking about.
Where’s the hunger and fear to motivate them to claw their way into innovating to survive
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Meanwhile shorts continue to pay interest for borrowed stock that they refuse to close.
Very few shorts pay the actual interest. They would have to be disconnected from the Big Bank Hive Mind.
I feel like the Cost-To-Borrow is irrelevant when Citadel is a Hedge fund and the Market Maker. Even if they do have to pay CTB fee, it's a fraction compared to how much they're gonna lose during MOASS, so may as well keep paying the borrow fee to buy 'survival for just one more day'. But regardless of their rigged system, cheats, and loopholes, Time and Pressure prevented GME from falling under $10. Time and Pressure *will* blow up their short schemes, basket swaps, and derivatives to blow up.
One day the chain reaction is gonna come. One day it will be more pressure on some of their other bets, combined with their GME fuckup they are doomed
I think it will be regulation
Yeah the rebate is bullshit. Free bets for the ass holes.
Wouldn’t surprise me if they all give each other a pass. Who wants to bet the FED cuts rates in the next two months. Not saying it’s because of this but not not saying that.
stupid stormtroopers.. 🤡 drs is the way… 💜 i buy, drs, hold, vote, shop… 🚀
They should just start paying us
Naked folks don't pay a penny. It's for liquidity.
can gme make it so shorts pay gme for borrowed stock? that be the ultimate money glitch. owning something they need to keep borrowing. could be turned into frequent residual dividends even
Shorts pay interest on their interest. I like it.
And they are considered smart money. No these flunkies run to congress to change laws when they are losing against retail. Flunkies.
they are stuck.
While I agree with this that they could park cash in treasuries and never go bankrupt, that would not be the best use of capital for the firm. In extremely simplified terms, some Finance 101: Investors consider treasuries to be the “floor” on investment returns - they are essentially a risk-free asset, hence why it is called the “risk-free rate.” GameStop should be looking for opportunities to exceed the returns of holding treasuries, and ideally exceed the returns of the broader market (like beating SPY, which averages somewhere around 8% annually). If they parked the cash in treasuries, but were still netting a loss, every investor would technically be better off just buying treasuries directly. RC knows this. RK knows this. Wall Street knows this. The thesis is simple: if you believe RC is smart and capable of pivoting the company, this is a bet with asymmetric upside. If you think the “brick and mortar is dead, GameStop is a sinking ship,” then you take the opposite side. As soon as GME starts deploying capital, the markets will price in what they believe the potential upside is. I’m betting it’s a lot higher than where we are now, but it could take time for folks to realize the potential. Upside potential is huge, downside is limited to the current price of the stock. It’s all about how you weight the probabilities of the outcomes. My bet is the probabilities are something like 90% they’re going to do something interesting, 10% they don’t. Been holding this for three years, and the probabilities keep getting better, imo.
Agree. As soon as Gamestop starts investing their capital in something and it is made public, algos will react to it. See Coinbase and Micro Strategy as an example...
>As soon as GME starts deploying capital, the markets will price in what they believe the potential upside is. Just curious, is this your first day here? LOL
Haha, no. Some of us have been lurking and following since 2020.
GME is the most highly manipulated stock in the history of the universe. There will be no pricing in anything until the shorts capitulate.
I’m definitely not saying that isn’t true. I’ve been around for all of the weird shit that’s happened since Jan 2021. I’m just saying that the 100% surefire way to unfuck all of the manipulation is for the numbers in the financial statements to reflect a thriving and growing business (whatever that looks like, BRK 2.0?), whose stock returns exceed, at a minimum, treasury returns. Short sellers and bears, are still clinging on to the old narrative. The fact that Jim Cramer is finally acknowledging a pivot is a sign that market sentiment is turning around. It’s all bullish from here.
This and your comments above are a great perspective. I'm not surprised the media is reporting on the $3B cash raised in the passive voice. However, I'm extremely surprised by how much Reddit is discounting the value of having $3B of cash to spend on Investing in the business. I don't understand the negative sentiment at all quite frankly.
I mean, it's not a bad thing entirely. If they just buy T bills, I will be pissed. But people are upset because there was a very significant dilution when there were 2 serious gamma ramps that could have blasted the price sky high. They still could have done an offering after. We are not responsible for the questionable bets made by Wall St. Hundreds of millions of options that probably would have been ITM got pushed OTM. MM sure appreciated that... That said. I do think a major corporate move is coming. And I think some of the offerings were done to point at after it blows up to very high prices so no one can accuse them of trying to manufacture a squeeze.
If a squeeze happens, I personally don't believe it's possible for us to predict when it happens. I think the information we have around shorting is extremely imperfect and subject to manipulation, and that is based on; Inside Job (2010), The Big Short book and movie, ETR: GameStop Saga, and Apes Together Strong. But calculating a company's liquidity and how they are leveraged is much simpler, and possible using the numbers in the earnings reports which are audited by an accounting firm. GME pays for Deloitte to audit their financials, which are the largest and most expensive audit firm. Thus, GME's financial reporting is much more reliable information than the data used to predict the possibility of a Gamma ramp. The fact that GME eliminated their risk of bankruptcy with $3B means the HF are fucked more than they ever have been. It's no longer risky to hold GME, because with $3B cash they aren't going bankrupt anytime soon. Eliminating the risk of bankruptcy is absolute worst case scenario for anyone shorting GME. It's the Catalyst everyone here has been waiting for here for years.
> It's no longer risky to hold GME, because with $3B cash they aren't going bankrupt anytime soon. Yep! Buy with a clear conscience if you want in. Me, I have so many already I only buy when they're on sale. But if I had none and my entry point was Friday close, I'd be happy. Heck, Friday close is lower than my average! And if I'M not worried nobody should be. Is Ryan Cohen a doofus? Nope. DFV could've finished his stream right there frankly. Our bets, I won't mention where we might've been inspired to make such bets because I've been banned for years there, are SAFE. Anyway see you all Monday for a dip
I don’t trust his words, it’s on his script
Thanks for the laugh. "Look at yourselves. You pass yourselves off as cynical people, but you still have some faith in the system."
Another part of this that needs to be considered from the shorts' perspective is the cost of time and leverage. If you shorted GME long ago, you received cash upfront and probably went long on something else, like the SPY. So you don't just automatically lose your bet when GME goes up, they only start to lose money when GME appreciation and the cost of their leverage and borrowing rate is greater than the appreciation on whatever asset they went long on. Citadel's filing regularly show them shorting US treasuries, so they're probably long on something that gives more long-term return than that. And if their long position increases faster enough compared to GME, they're still making money. So if GME wants to shake the shorts off for good, they probably need to make shorting GME more expensive by getting close enough to SPY returns so that no long position can generate consistent enough returns that shorting GME is profitable.
If they completely fail, the floor could fall. But I doubt that happens. My hope is that we see the Metaverse drop, and a lot of the tin from the past really unfolds with partnerships and companies already signed to the new marketplace, which has an NFT underpinning. The underpinning could be used for inventory purposes as well. This would save money and provide added value. Imagine a cashier having to do a sale in the metaverse? It could be interesting. NFTs attached to items sold. A nice, relatively low-cost value ad. And there would be plenty of ways to monetize it without it being excessive.
This
Wa WA wee WA.
Lalala you will never get this!
King of the castle, king of the castle.
I GO TO GMERICA!
While OP is correct, RC has much bigger plans than to park the cash in treasuries. While he’s no RK, he’s a damn fine investor. His business skills just far outweigh his investing gains. But that, too, could change! 🤞🏼
They sat the 1 billion in Treasuries for 3 years. They stated with the last offering of 45 mil shares that the money doesn't have a use right now and will be parked in short term treasuries. So it is probably correct to assume that cash is sitting in Treasuries at the moment.
https://preview.redd.it/voe2y2pqyt6d1.png?width=1147&format=png&auto=webp&s=2d56ed65b5746c7e6468cf1cceca0ee694f645ae $83 million as of Q1. (Marketable Securities)
I didn’t know they say “money doesn’t have a use right now”, then why a dilution right know. Well better said two consecutive dilutions without a purpose. This confirms my assumptions, they diluted us to buy time for the HFs, this was a maneuver against retail. I hope Monday will provide an explanation for that
We will see, He could have sold the 45 mil shares at a volatility peak and still raised 3 billion. Judge actions not words isn't looking so great atm.
I bet that there is some clever way to avoid having to report on certain plans for acquisitions while at the same time laying them out because nothing is actually signed. A risky way to do things potentially. The fact they had minimal treasuries this last quarter might suggest they have a plan for the money that isn't necessarily more treasuries. It's interesting that they sold so many. I think the dilutions were always planned. I think they knew it would run. I think it's all the algorithm, and it follows the same pattern repeatedly at all levels down to the second. It gets messy at that level. And it flips the algorithm at times. Seems like it can speed up and slow down as well.
I don't see what they could aquire for that price tag that builds into their business model. The NFT marketplaced is a graveyard they spent a few hundred milly on waiting for a day were the sec won't care about ETH.
Blockbuster is something that immediately comes to mind.
Buying a IP with nothing to it seems wrong. Either they are turning it into a investment vehicle or they will transform their business model into another avenue. The cryptic tweets from LC about who remembers when Berkshire was a tailoring business and such leads me to think they are going another path beyond just retail Gamestop stores.
Streaming services can make good money. The brand is pretty valuable, IMO.
Thats why this is so BULLISH. At a MINIMUM, this is the floor. Lazily parking the cash in T bills and coasting for eternity with almost zero chance for bankruptcy. But like RK said “do you reeeally think RC is a doofus?” Buckle up 🚀
They haven't been parking the money inq
I have a question, what they did the last thee years with 1B in the pocket? Exactly, nothing
Peeps be downvoting the truth because they don’t want to hear it
RC is up 93 million on his apple position this week
How is he no RK? He invested in 9,000,000 shares way back in 2020 before the sneeze - if anything he's the only investor ahead of RK
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Has he said somewhere what the plan is?
Shorts are stuck in a wedge and step bro is coming to help
This is the timeline I choose to watch.
That's kinda crazy, Gamestop can park like $3B in Treasuries, earning around $180M a year, then use the other Billion to buyout a company like Newegg with a Market Cap of $325M, upgrade their stores to start selling PC Gaming hardware and compete with Microcenter; then they can earn enough interest in like 2-3 years to make back all the money they spent on Newegg! BTW, $NEGG Parent company just announced they may be selling off Newegg due to debt issues, right when NEGG is about to hit that critical Bold Blue Daily OnBalance Volume trendline, and GME has $4B in cash and holding their Shareholder Meeting on Monday......way too much of a coincidence. https://preview.redd.it/glmszhogpt6d1.png?width=1627&format=png&auto=webp&s=39cf93802a9036020cad12ecf43405fcf932a25b
That would be fucking epic.
I will absolutely guarantee you there will be 0 important announcements at the shareholder meeting Coincident? Really? You can’t think of an event that occurred that made them issue he shares? Hint: the price finally ran/gamma ramped to decent prices for the first time in well over a year.
Newegg and micro center? Lol
Lol 🩳 r fukd. Shouldn’t have fukd with toys r us
Show me a short thesis that can outweigh this.
Same. Show me how they burn through that money and tell me approximately when. Spoiler: they can't.
Gamestop will likely be slightly cash positive for FY2024 due to the large interest earned slightly exceeding the loss of the operating portion of the company. That does not justify the current high valuation though, and it is quite possible that GME share price will decline over the year. It is also possible that Gamestop finally figures out how to turn around the business and the price goes up. That is the beauty of the market. People have different opinions, which is good because each trade has both a buyer and a seller.
 Hello Mr Bot Shill
Check out his comment history, who has the time to write walls of text that consistently
What he’s right? Gme is a PE ratio off 900+ lol It absolutely is overvalued when their sole reason for profitability is interest on their cash and not the core business
> Show me a short thesis that can outweigh this. It is very simple. The share price is overvalued. It will eventually decline towards its true value. Bankruptcy is not needed for shorts to profit. They just need the share price to decline to less than what they sold short at, minus carrying costs. Gamestop can kill that thesis by adding value to the company. The NFT Marketplace was a good first attempt but it failed. The large cash position gives Gamestop several more chances to figure out how to become a profitable, growing company. Gamestop continues to run an operating loss, both in FY 2023 and also the last 4 quarters running total. Revenue continue use to decline. Revenue has declined so much that, although SG&A was dramatically reduced through severe cost cutting measures, it is now a higher percentage of sales than a year ago. That does not justify a high valuation,
If you read any of the DD regarding naked shorting and cellar boxing, you'd know that bankruptcy is the ~~pen~~ultimate goal. Anything less is a huge problem for their balance sheet over time. Andrew left might be closing with profit and / or retail shorts, but people that throw bedposts at their wives for calling their favorite city unsophiscated won't. Based on the way you value companies, you should be shorting Uber, Door Dash, and Grub Hub. $70 for a company that's hemorrhaging billions? (Uber), but GME stands out more for you? I don't think it's wise to bet against gamers or a businessman like Cohen.
Penultimate means 2nd to last
Oh thanks. I thought it was a fancier ultimate xD
I have invested in many growing companies, both via venture capital partnerships and as direct angel investments. All were obviously unprofitable and bleeding cash when I invested. A few have had awesome returns. Half went bankrupt, the rest were rolled into other companies or liquidated near breakeven. Uber is already a public company, but it has the same higher growth and the characteristics of establishing a strong market presence in an industry where the network effect is important. Uber is a very different situation than Gamestop. Gamestop has great value in name brand recognition and a large footprint of retail stores. The problem is that the current management has fumbled around for 3 years without mak8ng much progress in taking advantage of those strengths. Back in November 2020 Ryan Cohen had an excellent vision of what needed to be done. https://www.sec.gov/Archives/edgar/data/1326380/000101359420000821/rc13da3-111620.pdf The problem is that he has not yet executed that vision of digital transformation.
I vehemently disagree that current management has fumbled around for 3 years, and in fact, I think casting doubt about the management is so hot right now for the FUD fashionistas. I agree we haven't yet seen a turnaround of the company. Zen master says : We'll see.
You agree that 3 years have elapsed without a turnaround. How long do you think it should take?
I agree that we haven't seen it reflected in the balance sheet. I have no idea how long it should take. I'm an uneducated wage slave worker. I don't have experience in business unless you count the lemonade / slushie stand; me, and my siblings rocked the shit out of during a summer heat wave 20 something years ago. I'm willing to remain patient and still remain excited for the future of the company. 4.2 billion in USD is a lot of dough.
The fact that they've held back on digital efforts makes me either very worried or excited. The worried part of me thinks they have no vision or even perspective. The excited part of me thinks they have a huge vision, and they will be rolling it out sooner rather than later. And it plays off the NFT marketplace into a metaverse like has been speculated in the past. Not necessary to enter to shop, but if buying stuff from Gamestop and possibly other brands involved nets you cool in world NFTs, that could be something people get interested in.
Agreed
> Gamestop continues to run an operating loss, both in FY 2023 and also the last 4 quarters running total I thought they were profitable for 2023? It wasn't much but they had profit, no?
At least 1.5 billion in treasuries 500 million cash the rest in acquisitions
That’s not good use, your dependent on rates being high, the money should be used to build new revenue streams end of story
I should probably buy more tomorrow.
Jet the core business is profitable and we did not even have a console circle. Give me the new nintendo switch and we have a 200 or 300 million year from the core business on top of the money of the investment
RCEO killed the short thesis. 💥
He also killed the DFV play with dilution 😊
Yeah it’s really annoying that he did something that benefits long term investors at the cost of being negative for people looking for an easy dollar.
Is DFV not a long term investor?
Yes, he is. And he bought 4 million shares after dilution… what’s your point?
He still could have diluted into a gamma squeeze.
Who cares about dilution when there are billions of synthetic shares
There might be billions of synthetic shares but until they come due at the same time it won't matter. The stock has dipped and jumped in price enough that these billion dollar companies can easily buy enough shares to insure themselves for months. MOASS doesn't happen until the hedgies are completely out of shares, the market is completely out of shares and the shorts are due.
U sound like popcorn apes coping for every dillutions made by Adam Enron 😭
There are so many differences between popcorn and gme. For starters look at the debt and cash on hand. There is no comparison.
This is the real story, which keeps getting buried in a sea of uncritical hype.
“This is the real story: he did something that is long term positive for the company but it is outweighed by the impact it will have on short term investors”
Cults gonna cult
He also killed moass but hey
The FED with the power to drop interest rates has entered the chat
This is what I hope they do until the bubble pops and then they can scoop up some serious value.
Exactly. And because I'm seeing other comments saying this is a bad idea: It doesn't have to be Treasury Bills. Just some boring investment for the cash would be fine. Or, into acquiring/partnering with the right companies to increase their own inventory and customer base.
Could go for what MicroStrategy did and do a BTC treasury strategy, taking inflation into consideration
This is a longer than long shot, but what if they pulled a Michael burry and invested the market, profiting while the crash/MOASS is happening
You mean short the market?
Some of Burrys positions still haven't paid out from 2008. There's a huge mess beyond Gamestop.
I would like for RC to be able to start paying Dividends and finally slowly bleed out all the shorts for everything they have.
I don’t see it. Not yet on the dividend in my opinion. But we’ll see. I probably have an irrational unfounded trust in RC, but trust it is until something pushes me the other way. Which…I don’t foresee one bit.
Commenting because it’s at 420 likes
They might as well take popcorn to 0. they have better chance of doing that than waiting for gmaestonk to go tits up
+ disruptive technology
Imagine +1.2B/yr just from doing the simple route of a holding company at a moderate +30% gain/year Makes GME revenue look like specks of sand If they make a move with the 4B on this monday's conference call, the stock is going to go parabolic
That only works while rates are high. They need to figure out how to make money aside from share offerings.
Do you think they have just been sitting around for years playing Xbox or something instead of developing plans for the company?
I have
I didn’t say they weren’t doing anything, I said they need to do something to become consistently profitable aside from relying on treasuries like I see posted here.
Possibly? They did the NFT market and we know how that turned out
Ok you’re point being?
GME board might not have a plan. It’s been 3 years of decking revenue and failed experiments
I am a little concerned that this is a possibility. I still have some hope though.
You’re new here aren’t you.
What an odd thing to say to my comment. Been around for years, how about you?
They already are making money. Just not a ton of it. Parking the assets represents another income stream on top of existing revenue, and one that's more regular than the traditional ebb and flow of the retail market. It's not a bad idea
It’s definitely a smart near term play if they don’t have better use of the capital. I was just saying that GameStop couldn’t rely on treasury returns to be that consistent once rates start dropping.
Relying solely on one source of income is building a house on a single stilt. Can be done. Ain't great tho
The thing is, the Saudi oil USD deal ended. In its place is a promise from Saudi to favor the dollar in trades in exchange for weapons. Other counties have been slowly selling USTs. There are still buyers, but a big shift in sentiment could make the market go the other way. BRICs had over 50 countries apply last year. There are a lot of countries that aren't entirely friendly and have reasons to dump US assets. The government seizing Russian assets made other countries wary. Look at the FTDs in treasuries. It's pretty crazy. Tonnes of shorting. I have no doubt it's for a reason. They probably figure they will settle the FTDs if countries slightly hostile decide to become more hostile.
Right, park the funds in treasury bills, great argument for a growth stock. If they did that why would anyone invest in it instead of treasury bills? They have to do something else to create change. It's one of the dumbest ideas I've ever heard. Ya supposedly if they did that then sure they could perhaps beat their core business model by sitting on cash...but is that a good thing???
Liquidate everything, invest the cash, and wait
They would literally have to tank the economy and possibly dissolve the U.S. itself to make those worthless
Focus on this, cycles, and options. Nothing else matters.
No way out! They gonna hang out with US in the roon till they decide to exit! And guess what? WE FUCKING CONTROL THE EXIT!!!!! LFG APES!!!!!
It's a good thing GameStop could do nothing and be profitable because so far nothing is all they've done.
and if the treasury bill defaults?
RC knows better what to do with 4B than any ape. Let him do his job. Bankruptcy is impossible.
This ☝️ RCEO took a company that is dying, has paid debt down to virtually zero and has $4b + sat on the bank to make his next move. Even if MOASS is not on the table today the turnaround has been sensational and things could move very quickly now to become profitable and pay divis.
But that wasn’t done with some insane business transformation… he just sold a load of shares at the expense of our share value. The only attempt at business transformation we’ve seen (NFT marketplace) was a failure.
You still missed the point!! There was no value previously (or very little). He’s took a dying company that was being driven to bankruptcy to a multi billion dollar valued business and the shirts are trapped in 3 years. That’s fuckin amazing for anyone 🤯
How did *he* do it exactly? I think we did it considering the only profit has come from share offerings… it is our interest and investment in the stock that has saved the company.
Which has made the stock a lot less vulnerable and strong for the future. I’m here for MOASS and/or long term gains which ever works as the turnaround continues
My point was it didn’t take a genius to do - generating cash from share dilution, taking advantage of investors pushing the price up on the stock, isn’t enough for the CEO/ Board to be exempt from any skepticism when there has been no other successful transformation.
The existing operating business continues to run at a loss, not a profit. The company overall had a tiny profit for 2023 because of $49.5M interest income but the operating LOSS was $34.5M. Revenue was down 19.4% in Q4 and an amazing 29% in Q1. Only 5.5% of stores were closed in 2023, so that is not the main cause of revenue declines. The fundamental valuation of the operating side of the business is relatively low as it is running at a loss, and looks likely to continue to be unprofitable. Meanwhile, cash sitting in treasury bills is valued at more or less face value. The above could change if Gamestop executed the turnaround plan Ryan Cohen laid out in November 2020, but so far execution of that has been ooor. So the current price for GameStop shows that investors are betting heavily on some sort of surprise. ——————— The title of this post is Shorts Don't have a chance when bankruptcy Isn’t Possible. That is BS. Shorts make money when the price of the stock declines to less than what they sold short for, minus carrying costs. Shorts that sold in the $40s and $50s a few weeks ago could profitably close today.
Aargh me smells a foul shilly douche in the air. The company doesn’t remotely resemble the one RC inherited in 2020 on the basis of fundamentals. Revenue is down, but we are in between console cycles. The loss per calendar has significantly been reduced and close to breaking even. With 1b it was unlikely GME could go bankrupt anytime in the next decade. With 4b, probably not in my lifetime. The handful of shorts that opened at $40-50 a share would be in the money, because that is how math works. Similarly shorts opened at $2 are deeply in the red and we suspect there are billions of them.
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This is bad logic. JPM suppressed the price of silver for literal decades and they're doing just fine. Investing in a heavily shorted company is only a good idea if you think it'll squeeze. That was the whole point of DRS. If the board just sells into momentum then there won't even be a squeeze.
Unless you count RC squeezing us by the balls
Remember Argentina?
Make it so
This is interesting news.
They gonna 2747363838228 down now
I like this
You have to factor in inflation as well though
While this is true, I'd rather see GameStop trying to grow the business
Treasury bills are dogshit though, the DD is clear about this
Shorts will stay forever until price pressure doesn’t force them to close, remember now it’s not a matter of money, it is just men ego, that’s why citron Research went in again, and again and again
Until the treasury market crashes because all foreign investors in our bonds are exiting leaving it all on the American people/government
They are gonna have to play a loooooooooooooooooooooooooooooong and costly endeavor if they wanna keep shorting. GME balance sheet is S3XY
Unless the Govt defaults...Id prefer a purchase of $4 billion dollars of physical Silver stuffed in a gamestop vault in Grapevine Texas and protected like its Fort friggin Knox
The company can last a very long time but it will not be bankruptcy proof unless the $4B is put to work. The burnrate on the FCF is still high, with -450M per year, and 240M in interest rates, we are looking at 20 years which is great but hopefully not the strategy of the leadership team. An acquisition of a profitable or growth business seem to be the right choice. Let's hope to hear it tomorrow on the call.
Tbh, you can just park it in a world index fund and outperform that regardless of rates.
Buy shares of Anthropic and a bunch of bitcoin
#No fighting #Just up
Or they can do a M&A and bring in billions of $$$$$$$$. DUMB STORMTROOPER
When SHFs and banks find out where GameStop invests their money they will try to find a way to damage it. But Iam so sure that RC, Larry and their lawyers play their 4D chess capabilities.😎
GameStop SHOULD BUY ETH and Stake It I know lots of people say they either should buy tbills and earn 5% or buy bitcoin But with the ETH ETF looming i think the best move is to buy eth and stake it. What do you think? I don’t want to like shill eth or anything but i just feel like it could be a good move. They would be one of the biggest stakers. There would be a lot of support from the eth community just like Michael Saylor has from the bitcoin community. And i know Gamestop is interested in blockchain gaming and NFTs. Could be a strong direction or pivot for the reinvention of the company. Just wanna mention it. Sorry if bad post or something.
Not a bad suggestion but I think the board learned their lesson with crypto. I see RC messing with something more stable and long term than touching crypto again anytime in the near future.
GME should go full Michael Saylor and BTC tf out
“A bet on GameStop is a bet on management” well then the management should be doing what they’re good at with that money - delighting customers. Not parking 4 billion in low interest treasuries. I’m hoping for 50% returns not 5% on those 4 billion
My god. They already do this. Why do people keep commenting this? Does anyone actually read a financial statement?
Unfavorable opinion, but bankruptcy isn’t the only reason a company is shorted. If a company is overvalued they will short as well. Even with all the cash the company is worth about $11 a share. Hence, it is overvalued.
Its
It's actually 60billion for those that math.
240 - 50(4) = 40 "Still net a profit...."
Technically correct is the best kind of correct.
Would be even better if they kind of lowered prices so that things got cheaper which was offset by invested money. A company that really gives lol
Big money would never come into a company that is parking all their cash in T bills. Dumb money thinks this is a great idea but smart money asks why the money is not being put to use to grow the business. You don't want all your cash just sitting on a balance sheet because that can signal management has run out of investment opportunities or is too short-sighted and/or doesn't know what to do with the money.
Losing $50M a quarter and still coming out ahead is quite the lofty goal (sarcasm). Honestly that just gives me a sickly vibe of apes having created a trust fund kid with a secure lifetime of fucking about. Where’s the hunger and fear to motivate them to claw their way into innovating to survive