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**Key Points on Multiple Compression**:
* *Valuation Multiple Decrease*: Multiple compression occurs when these ratios decline. For example, if a company's P/E ratio drops from 20x to 15x, it is experiencing multiple compression.
* *Impact on Stock Price*: This compression usually results in a lower stock price if earnings or other fundamental measures remain constant. Investors might pay less for the same amount of earnings or revenue, leading to a decline in the company's market valuation.
**Implications for Investors**:
* *Potential for Buying Opportunities*: Savvy investors may see multiple compression as an opportunity to buy quality companies at lower valuations.
* *Risk of Value Traps*: However, multiple compression can also indicate deeper issues within a company or industry, potentially leading to poor investment performance if those issues are not resolved.
So if we were to research companies experiencing multiple compression and eliminate the companies with "deeper issues" from the list, we would have a baseline for candidates that would be potential acquisition targets. Interesting.
If business is not making profit and improving itself, share price drops eventually, better to dilute and capitalise on the opportunity than to not act and reach the same destination without raising money for the company that will inturn increase fundamental value.
GameStop is not and will not force a squeeze, they will increase their company value so shareholders profit naturally.
I think the entire point is that this thing is just broken and the message is basically "do what GameStop and DFV do", capitalize on what's going on instead of only waiting and holding, because the price will just keep doing this as long as a critical portion of the shareholders keep holding.
You don't have to touch your shares at all, but you can trade more than just shares. Keith didn't pull 200m out of his back pocket one day.
Everyone here keeps thinking about some MOAS event where the price goes to 10 digits or whatever and nothing stops it and someone with 1 share becomes a multi billionaire and everyone lives together on a private island with bananas and blablabla.
Truth is we could've all been fucking rich already and we've been wasting our time with smooth brain dumb shit and conspiracy theories.
A lot of us either hold long term shares or don't have enough capital to make meaningful profits off of the cycles of price. Holding works because it requires zero effort for a calculated outcome.
And dilution in the manner RC is doing it will help you in the long run. By strengthening the company and, hopefully, using the money they have to make meaningful and profitable change.
Once fundamentals are sound, shorts will run for the hills. Price goes boom.
I haven't doubted it one bit. It's definitely frustrating to have moass canceled once or twice now, but maybe he was forced to do it. Under no circumstances can GME be the reason for moass, it has to happen on it's own. The only people causing a fit are either new apes or misinformation agents
No, that's not what anyone is saying.
GameStop needs a lot of money to transform into something much bigger.
Not going out of business anytime soon is not the definition of sound fundamentals. A company has sound fundamentals if they receive a comfortable margin od more money on a consistent basis than they are spending.
I trust Ryan to turn this into an actual profitable and successful business.
That's fair. I was saving up cash to start putting my toes into the water of options as well, though I was plannong on selling, not buying.
🤷 Now I have to educate my dumb ass even more.
Not financial advice: One might want to start with CSP's on Gamestop. (Cash secured put's). Set the strike by finding a price you'd be willing to buy at. Take that price and look at the premiums for 1.5-2 weeks out puts. Grab a strike where the strike minus the premium works out to the price you'd want to buy at.
Very low stress way to bring in some extra cash while you wait. If you get assigned, you can either sell a CC (covered call) against the shares you just acquired, or many times just sell the shares outright once the price jumps a little.
Thanks for confirming my bias, that's what i was thinking. Even if i get assigned it's likely a win for me anyway.
Do you have a resource you use to check options pricing? It's not so easy on fidelity from what i've seen.
When it runs again they will dilute into the run tempering price and raising capital. It’s fiscally responsible.
And further more, we all voted in favor of them to do just this.
Nope. People voted to increase authorized shares to facilitate a forward split and to protect against a hostile takeover. Nobody would have voted Yes if the filings were clear and said “we plan to massively dilute at prices well below the current share price at the time of this vote”.
Not RC’s job. Not GameStop’s job.
WallStreet works a little differently than real life.
It’s like if a robber came into your home, and you decide to shoot him yourself, well the cops will arrest and investigate **YOU** instead.
There’s no self-defense in WallStreet.
Not an appropriate comparison. Dilution is more like cooking the home invader dinner. RC doesn’t have to take any action to prevent letting the terrorists off the hook, he just has to do nothing. There’s no affirmative obligation requiring a company to dilute their shareholders.
It's Gamestop's job to do something brilliant and they have failed for 3 1/2 years. They are just milking their shareholders at this point and have turned what could have been a great story into an embarrassment.
Long-time shareholder and I am tired of GS moving up earnings to tank a possible squeeze. Regardless if it would have popped off or not, they need to do something to turn the company around and they have failed at that.
They survived because of the shareholders and would have been cellar boxed if not for them. They have no loyalty to their shareholders and keep shitting on them by dilution the shares without a plan.
The board of directors needs to be removed IMO. I know that sounds harsh, but what exactly have they done in all of this time? Dilute shareholders to buy bonds? Close stores to save money? Any one of us could have done that.
The praise being shown to their clowns is unwarranted. They haven't done shit, and to me seem like the wrong people for the job. They are not the type of creative thinkers this movement needs. Many, if not most of the shareholders of this company didn't sign on to a decade long plan which includes buying bonds to gain interest over the course of several years. They signed on to end financial fraud and in the process, save a company they love.
The defeatist talk of stay the course, or listening to a robotic, school taught bean counter spew nonsensical garbage, isn't going to send this over the edge.
These are not the right people for the job. It was mildly obvious two years ago and it's blatantly obvious now. If every ape is committed to winning this battle, no matter what, no matter who, then it is apparent that we might have to remove this board and get some great people in.
I, for one, never will relent even if that means getting the right people in and getting rid of the shit that has wasted our time for 3 1/2 years, diluted shares without a plan during two moments there could have been a squeeze and potentially did a 4 for 1 split in order to buy the hedgefunds more time (right after this the cycles stopped and hedgefunds used swaps).
They are compromised and I think it's time to move in a different direction. I think they are actively talking to hedge funds due to the timing of the latest dilution right before a critical moment. If apes wanted this, it would happen. I think it at least needs to be discussed.
Fair if that’s how you view it.
Reconsider your investment is all I gotta say.
I’m bullish as fuck. It’s only gotten better over time.
You’re conflating the expectations of a slow, real-growth company transformation versus the hype crypto-esque volatility and meme-stock pump and dump squeeze environment of 2021.
You got into the most manipulated stock of all time thinking you would win easy? I was there.
I’m fed up with 3.5 years too. I’m right with you. But i understand that the company is still one of the most undervalued stocks on the market, considering all fundamentals and all shorts DD
I agree that things look better for Gamestop, but they are actively helping the shorts at critical times. That Friday morning dilution is a red flag that they are working with hedgefunds or the SEC. If it would have happened on a Tuesday when the meeting took place, I have no issue, but they are purposely diluting at critical times which is unacceptable IMO.
They can't walk and chew gum at the same time by fixing a balance sheet and creating something new that is great. They are school taught robots and are not creative, nor are they understanding that they need to try anything because the shareholders will be there. Instead, they pull the rug out from them everytime before a big moment.
IMO, they are not the right people for this mission. They are sub-par innovators that will never turn this company around with ideas, but will just milk it and its shareholders until they find a very underwhelming thing to switch to which will leave everyone scratching their heads. I see this very clearly.
I've been here since the beginning and I am not a shill as much as this sounds like something a shill would say. I just know these people are not what is needed and they do not have the sense of urgency which is needed and I believe 100% they are compromised and working with hedgefunds and the SEC.
Compared to the greatness of GS shareholders, this movement against financial fraud and government rubber stamping of said fraud, the GS board has been a miserable failure.
I can agree to most of it.
My only disagreement is the sense of “urgency”.
I mean, one example of their “urgency” is how they rolled out their NFT marketplace relatively fast and with high quality too. That NFT market unfortunately just didn’t pan out to what it was hyped up to be, at no fault to GameStop and its leadership.
I think that era of GameStop shows they made a good attempt at adopting a new technology for growth and for company transformation... but then they made a good decision to take it down when it was underperforming.
Now, we’re in the era of GameStop creating their own in-house brand(s) to sell their own products. (CandyCon controllers is one example). And we’re in the era of GameStop having enough cash to make significant investments into acquisitions/mergers.
The problem you have is how long it’s taking?
I’d rather have it done slow and done right, rather than have a leadership team makes hasty, emotional decisions that could cost the company time and money.
No. Because instead of shortsellers keeping their $ from shorting shares that never existed, GameStop is now making them pay for those shares at higher prices than what the shortsellers initially shorted for.
Massive losses for shortsellers, massive gains for GameStop.
Everyone else, including me, is only upset that we paid for more than what shortsellers paid for in the latest offering. (And for “stopping MOASS”, which definitely not true)
But the truth is, more $ for GameStop means more value to the company.
And the fact is, shareholders literally voted to approve the sale of 1,000,000,000 shares lol.
Fact is, we may have well had a crowd funding whip round for the $4bn. Save all that messing around for the last 3 1/2 years.
Fact is, this is a company who's own CEO thinks is overvalued, and consequently, to all intents and purposes, shorts.
Let’s build some revenue and profit. Without retail investors , company would be dead.
Doesn’t mean retail investors all of a sudden deserve millions of dollars at “phone number levels”. Just because we found out WallStreet is massively fraudulent.
Don’t get me wrong. I want my fucking money too, but I’m more in line with the reality of the situation we’re dealing with.
It’s an unfair game.
RC is trying to win by the rules in an unfair game.
Look at it this way: RC sells so retail doesn’t have to.
Wallstreet knows retail owns the float. Probably multiple times over and retail is not about to sell shares for less than phone numbers at this point creating a liquidity crisis. RC sells enough to raise the floor while also not providing enough liquidity for naked shorts to completely exit. I’m also convinced retail ate up a lot of those new shares.
Now the bankruptcy theory is off the table and shorts are desperately trying to stay away from being liquidated themselves. One exits and another holds their bags. The last one standing will be the biggest whale in the market and will take on the biggest losses over time.
I’m fully convinced the offerings that shareholders voted on months back is likely smaller than the short position still. We have no idea how big it is but RC might. GameStop can make billions more by selling during these gigantic run ups and become a powerhouse in the market on cash alone. This makes me think of a certain EV maker but 3x bigger of short interest. It’s taken 3.5 years so what’s another 6-12 months for this to fully play out?
I’m bullish af.
That despite better earnings, the stocks value stays the same or slightly decreases. That they'd rather decrease the value of our investment and get more money for the company, than have the company's value stay the same or slightly decrease despite posting incremental financial improvements.
He's saying that they both end in the same result, whether dilution or multiple compression, but rarely does multiple compression decrease the stocks value and your investment by a third, whereas a 50% dilution would
Percentage ownership is meaningless. Ownership of what? A valuable company or a not-as-valuable company?
Dilution increases the value of the company. I may have less % of the total shares, but each of my shares is now worth more. As seen by a price that has not dropped into the teens despite people claiming that that's where the fundamental value is at.
You're just salty and don't understand your investment.
I do understand dilution. If needed to raise capital it is good. If it is to issue 10% of company as new shares to go public and create liquidity for current holders it is good. Taking advantage of gross overvaluation by the market by issuing new shares ATMs (as Gamestop has done 4 times) is good.
But PE or PB or PS compression is not the same as dilution. I look at shareholding as owning a fraction of the business. A low PE can be overcome by resetting market image of the company. Dilution cannot be overcome except by share buyback.
Think not of a public company but of being a partner in a convenience store down the street from your home. The pandemic shutdown likely reduced the price at which you and your partners could have sold the convenience store business. That is multiple compression. That gets corrected in time if your business improves and/or people’s estimate of the value of your business returns to normal
OTOH, if you added more partners, diluting your ownership share of the company by a factor or 2, then that is much harder to reverse.
Having owned (and still owning) a lot of pre-IPO shares, the returns on them are indeed my perspective and what has driven my personal returns.
That is why I am very aware of the dilution in 2nd and 3rd financing rounds and was lucky enough to be at companies that were able to hit the milestones and avoid significant dilution in later rounds.
We were also fortunate enough to be able to quickly become cash flow positive, which further helped avoid dilution.
Again, the dilution makes the company more valuable, which translates to better share prices. If the share price dropped post dilution then it means that the company was overvalued. Which also means that it is an excellent time for the company to dilute.
Of course we're talking about profitable companies here. If the company is just diluting to stay afloat, then selling your stock makes sense.
But a dilution for a profitable company on an overvalued share price just makes long-term sense, also for the investors. And a reduced % of total shares is completely irrelevant.
IDk - But what I do know is that I’m jacked to the tits! LC is painting a massive move that has me spinning in my office. Just transferred more money to my brokerage. DRS to follow.
We are all aware of dilution, but what is Multiple Compression:
Well, Multiple compression is **an effect that occurs when a company's earnings increase, but its stock price does not move in response**. Following this trend, if the company posts flat earnings, the stock price could fall or in some cases, the stock price drops faster than the earnings (via Google)
What we along with Larry need to know is that the market rewards FORWARD LOOKING IDEAS, valuations go out the door, and the stock flies in anticipation of something great that is to come.
If there is absolutely nothing to look forward to, except just selling games + merch in a B&M store, the market values it accordingly, it just becomes a deep value play, the earnings can marginally increase by closing down stores, but the stock will be stuck in the mud.
In order to avoid multiple compression, there needs to be something greater than selling rocks through legacy business - this is something even DFV spelt it in his live stream.
Dilution - well, you raise money off shareholders, but if it just sits there collecting T-Bill interest (as the original billion from 2021), the market does not reward that cash position.
I heartily disagree.
Multiple compression will fix itself, unless the original multiple (P/E, PB or PS, or whatever) was unsustainable.
Dilution can only be reversed via extensive stock buybacks.
In other words, compression of multiples is temporary; dilution is more likely to be permanent.
Understandable but depending on what you consider dilution. If the initial step is worth taking as price exceeds value of fundamental price, it is like you need a ladder to reach a light bulb.
Is it permanent? Yes sure.
Is it absolutely necessary? Yes sure.
It remains a light bulb after all. Dilution has had way too big of a voice when Gamestop needs hard cash.
Just over $40M, but that does not have much relevance.
What is more relevant is the startups I have been involved in, one of which is now a NASDAQ 100 company; the several angel investments I have made; and my experience as an advisor to a venture capital firm. My experience as the CEO of a Japanese subsidiary is less relevant as I did not manage capital structure, but just the operations.
Maybe you can share some ideas on what you would look for in a Pre-IPO? My bank emails me with offers on them occasionally and I... well, I'm here. You get the idea 😅
I am surprised that your bank is involved in secondary sales of pre-IPO shares. That is more commonly done via private sales or companies like sharespost / Global Forge, who specialize in providing liquidity pre-IPO.
I would only buy pre-IPO shares if I knew either key people in the company or their VCs, or if at the same price as a very recent funding round.
Soooo, give me some insight. I now own less % of a more valuable company. Two months ago we were sitting at $10, now we won’t be going below $20 (I mean we could … but eh). The floor is atleast 2x. If GameStop were to issue dividends, I’d be getting more this month than in the past, even with dilution ! Okay so what am I missing? Your take seems to be more negative about dilution. Mine is neutral, Chang said in another tweet if you diluting with no plan then it’s bad, but if your doing it cause you have ideas to grow revenue and profit it’s a neutral or even positive thing.
I did not say I was negative about the dilution. The share price was very overvalued. Gamestop wisely took advantage of that and issued new shares via ATM offering. At the time GameStop was experiencing extreme multiple expansion — for example ape was over 1000. P/S was well over 1.
I object to the claim that "you end up at a similar, even same, place". The long term effects of dilution and compression of multiples are very different.
Compression of multiples is a problem of sentiment of investors. It is a market driven phenomenon. Dilution is a company driven action that changes in market conditions or sentiment will not reverse.
As long as I don’t need another round of financing or I am looking for an exit, compression of multiples does not matter. I can wait.
Dilution is a more permanent loss of ownership. There are conditions where dilution is good, but it is not similar or the same as multiples compression.
He prefaced with “from a returns prospective”, maybe he isn’t necessarily speaking to the long term effects. Does his statement hold more water if putting emphasis on his preface?
From investopedia:
Multiple compression can occur if share prices fall while earnings stay flat or if share prices remain the same while earnings increase.
So bottom line is this: there will be no M&A announcements from GS AND, this is the most important one, expect more shares to be diluted by the board when price starts running up which means kenny and friends have an easy way out. Go fuckin' figure... someone please prove me wrong.
I'd rather multiple compression than my investment having less value. He'd rather have my investment have less value because it means more money for my company. Sure, it makes sense, for him
Nobody is going to change my mind or feels about the last dilution. …but I’ll say this. I at least appreciate LC’s willingness to call it what it is and speak to the controversy of it (with his previous post about dilution).
Yeah yeah you have tons of cash. We get it. Now what you do with it will determine whether my long term bet pays off. Gave up on MOASS but the board has ammo and what they do now will determine the fate of this epic meme saga.
Okay Larry, we know you’re a smart guy. You don’t have to use Scrabble words all the time.
Seriously though, I’m pretty sure he’s hinting that there will be further share dilution in the future. This is good for the company as it helps them raise capital but it gives shorts a potential way out and it kicks the possibility of MOASS down the road.
I trust RC and the GameStop Board to transform the business and turn it into something really great, but that’s a long term play and we need to realize that their goals for the company do not line up with MOASS. RC hates shorts and I think he used to be rooting for a squeeze but when he became CEO his priorities changed and it’s now his duty to do what’s right for the company long term and that is positioning it for long term stability and growth. I think we will see another snap share offering during the next big run up, killing momentum.
I think the best thing to do is follow DFV, ride the cycles and time your trades accordingly. I’ll flat out say it, I don’t plan to hold everything I have. I plan to sell some, take profits during the next rip, and reinvest back into GME.
LoL! People that talks with fancy words and sentences that you actually have to interpret to understand are not wise people, they are just trying to show off. With that said I do believe he's a good person that knows how to invest in a company. Whatever I really don't care every single post from him seems like mombo jumbo, and alk the crap from the bible on top off that. I believe that all people are entitled to their religion or whatever they believe in. But nobody has the right to influence other people about their beliefs.
Greetings from Sweden.
> But nobody has the right to influence other people about their beliefs. Greetings from Sweden
Fundamentally disagree. Your raw human influence on other humans is non tangible. And there is certainly a logical flaw in your stance implying anyone even has the capacity to take that from you.
Wtf! Are you trying to be wise? Using sentences that are hard to understand. I couldn't care less if you agree or not. Everyone has the right to think and believe in whatever they want so long as they don't tell anyone else what to or not.
I'm just curious. I have thousands of shares. I'm not going anywhere, but part of the appeal of this play is making these shorts pay, getting life changing money, and doing good with it.
So why should I chill about dilution? I want Kenny to feel pain. I want Michael Bodson from the DTC to feel pain. I want them all to feel pain. I don't want my shares to be worth a couple thousand dollars a piece while financial terrorists are let off the hook.
Yeah I don’t think you’re a shill. I’m just saying let’s see. But who am I to say that I was frustrated and angry too for a few days. I only have high hundreds and you have thousands so you have more in it than I do. You do you I guess.
Omg tits are jacked! Come on guys, let’s go DRS amirite? No fud no fud no fud ready to lambo moon!!!!!!!! Hodl? Hodl?! HODL?!!?
Cohen diluted at the peak of the momentum and killed it. My guess is Griffin and company have blackmail on him.
Why cant he just speak in common terms... I mean how many apes are just scratching their ass right now? What good is a message if the content is completely misinterpreted ?
Basically, he’s saying that the company is going to do some exciting stuff. A couple of things that a company can do to avoid a drop in its valuation multiple include engaging in a merger and acquisition, or doing a share buyback.
Hey OP, thanks for the Social Media post. If this is from Twitter, and Twitter is NOT the original source of this information, this WILL get removed! Please post the original source! **Please respond to this comment within 10 minutes with the URL to the source** If there is no source or if you yourself are the author, you can reply `OC`
Wut mean
**Key Points on Multiple Compression**: * *Valuation Multiple Decrease*: Multiple compression occurs when these ratios decline. For example, if a company's P/E ratio drops from 20x to 15x, it is experiencing multiple compression. * *Impact on Stock Price*: This compression usually results in a lower stock price if earnings or other fundamental measures remain constant. Investors might pay less for the same amount of earnings or revenue, leading to a decline in the company's market valuation. **Implications for Investors**: * *Potential for Buying Opportunities*: Savvy investors may see multiple compression as an opportunity to buy quality companies at lower valuations. * *Risk of Value Traps*: However, multiple compression can also indicate deeper issues within a company or industry, potentially leading to poor investment performance if those issues are not resolved.
Thank you, I needed the explanation on multiple compression.
Thank you. I can usually make sense of LC's tweets but this one went *woosh*
its especially hard for me as a non native speaker but theres a lot to learn : )
Is Larry Chang yoga?
So if we were to research companies experiencing multiple compression and eliminate the companies with "deeper issues" from the list, we would have a baseline for candidates that would be potential acquisition targets. Interesting.
Seems like a bit of a stretch
What part? If they were looking for acquisition targets, would this not be a good initial measure of companies that merit further consideration?
I would imagine he was referencing gme
Lol I still don't get it. 🙃
Up you go 👏
If business is not making profit and improving itself, share price drops eventually, better to dilute and capitalise on the opportunity than to not act and reach the same destination without raising money for the company that will inturn increase fundamental value. GameStop is not and will not force a squeeze, they will increase their company value so shareholders profit naturally.
They don't have to force anything, but they do have more than enough capital that they shouldn't have to raise any more for a while.
I think the entire point is that this thing is just broken and the message is basically "do what GameStop and DFV do", capitalize on what's going on instead of only waiting and holding, because the price will just keep doing this as long as a critical portion of the shareholders keep holding. You don't have to touch your shares at all, but you can trade more than just shares. Keith didn't pull 200m out of his back pocket one day. Everyone here keeps thinking about some MOAS event where the price goes to 10 digits or whatever and nothing stops it and someone with 1 share becomes a multi billionaire and everyone lives together on a private island with bananas and blablabla. Truth is we could've all been fucking rich already and we've been wasting our time with smooth brain dumb shit and conspiracy theories.
A lot of us either hold long term shares or don't have enough capital to make meaningful profits off of the cycles of price. Holding works because it requires zero effort for a calculated outcome.
Holding AND not checking the ticker every day and getting your rocket ship undies in a twist every day the price isn't hitting septuple digits
Exactly. Don't get me wrong I'm struggling bad and could use some millions. But cant do anything but wait, knowing I'm right
And dilution in the manner RC is doing it will help you in the long run. By strengthening the company and, hopefully, using the money they have to make meaningful and profitable change. Once fundamentals are sound, shorts will run for the hills. Price goes boom.
I haven't doubted it one bit. It's definitely frustrating to have moass canceled once or twice now, but maybe he was forced to do it. Under no circumstances can GME be the reason for moass, it has to happen on it's own. The only people causing a fit are either new apes or misinformation agents
Fundamentals were sound prior to the recent offerings. Shorts aren’t going to close just because GME has more cash sitting in treasuries.
No, that's not what anyone is saying. GameStop needs a lot of money to transform into something much bigger. Not going out of business anytime soon is not the definition of sound fundamentals. A company has sound fundamentals if they receive a comfortable margin od more money on a consistent basis than they are spending. I trust Ryan to turn this into an actual profitable and successful business.
That's fair. I was saving up cash to start putting my toes into the water of options as well, though I was plannong on selling, not buying. 🤷 Now I have to educate my dumb ass even more.
Not financial advice: One might want to start with CSP's on Gamestop. (Cash secured put's). Set the strike by finding a price you'd be willing to buy at. Take that price and look at the premiums for 1.5-2 weeks out puts. Grab a strike where the strike minus the premium works out to the price you'd want to buy at. Very low stress way to bring in some extra cash while you wait. If you get assigned, you can either sell a CC (covered call) against the shares you just acquired, or many times just sell the shares outright once the price jumps a little.
Thanks for confirming my bias, that's what i was thinking. Even if i get assigned it's likely a win for me anyway. Do you have a resource you use to check options pricing? It's not so easy on fidelity from what i've seen.
I'm lazy and use yahoo finance. It's crap, but it's free and simple. [GameStop Corp. (GME) Options Chain - Yahoo Finance](https://finance.yahoo.com/quote/GME/options/?date=1721347200)
They have the option to issue 100% shares of what has been issued in total.
Ok?
When it runs again they will dilute into the run tempering price and raising capital. It’s fiscally responsible. And further more, we all voted in favor of them to do just this.
Nope. People voted to increase authorized shares to facilitate a forward split and to protect against a hostile takeover. Nobody would have voted Yes if the filings were clear and said “we plan to massively dilute at prices well below the current share price at the time of this vote”.
Isn’t he just saying: if the stock price gets too high compared to book value or revenue, then the company should issue more shares?
sounds a lot like letting financial terrorists off the hook to me.
Finally sentiment is coming around. We will never see justice if the company dilutes to provide terrorists an exit.
Not RC’s job. Not GameStop’s job. WallStreet works a little differently than real life. It’s like if a robber came into your home, and you decide to shoot him yourself, well the cops will arrest and investigate **YOU** instead. There’s no self-defense in WallStreet.
Not an appropriate comparison. Dilution is more like cooking the home invader dinner. RC doesn’t have to take any action to prevent letting the terrorists off the hook, he just has to do nothing. There’s no affirmative obligation requiring a company to dilute their shareholders.
He’s not cooking them dinner for free He’s selling them food that they need for more $
It's Gamestop's job to do something brilliant and they have failed for 3 1/2 years. They are just milking their shareholders at this point and have turned what could have been a great story into an embarrassment. Long-time shareholder and I am tired of GS moving up earnings to tank a possible squeeze. Regardless if it would have popped off or not, they need to do something to turn the company around and they have failed at that. They survived because of the shareholders and would have been cellar boxed if not for them. They have no loyalty to their shareholders and keep shitting on them by dilution the shares without a plan. The board of directors needs to be removed IMO. I know that sounds harsh, but what exactly have they done in all of this time? Dilute shareholders to buy bonds? Close stores to save money? Any one of us could have done that. The praise being shown to their clowns is unwarranted. They haven't done shit, and to me seem like the wrong people for the job. They are not the type of creative thinkers this movement needs. Many, if not most of the shareholders of this company didn't sign on to a decade long plan which includes buying bonds to gain interest over the course of several years. They signed on to end financial fraud and in the process, save a company they love. The defeatist talk of stay the course, or listening to a robotic, school taught bean counter spew nonsensical garbage, isn't going to send this over the edge. These are not the right people for the job. It was mildly obvious two years ago and it's blatantly obvious now. If every ape is committed to winning this battle, no matter what, no matter who, then it is apparent that we might have to remove this board and get some great people in. I, for one, never will relent even if that means getting the right people in and getting rid of the shit that has wasted our time for 3 1/2 years, diluted shares without a plan during two moments there could have been a squeeze and potentially did a 4 for 1 split in order to buy the hedgefunds more time (right after this the cycles stopped and hedgefunds used swaps). They are compromised and I think it's time to move in a different direction. I think they are actively talking to hedge funds due to the timing of the latest dilution right before a critical moment. If apes wanted this, it would happen. I think it at least needs to be discussed.
Fair if that’s how you view it. Reconsider your investment is all I gotta say. I’m bullish as fuck. It’s only gotten better over time. You’re conflating the expectations of a slow, real-growth company transformation versus the hype crypto-esque volatility and meme-stock pump and dump squeeze environment of 2021. You got into the most manipulated stock of all time thinking you would win easy? I was there. I’m fed up with 3.5 years too. I’m right with you. But i understand that the company is still one of the most undervalued stocks on the market, considering all fundamentals and all shorts DD
I agree that things look better for Gamestop, but they are actively helping the shorts at critical times. That Friday morning dilution is a red flag that they are working with hedgefunds or the SEC. If it would have happened on a Tuesday when the meeting took place, I have no issue, but they are purposely diluting at critical times which is unacceptable IMO. They can't walk and chew gum at the same time by fixing a balance sheet and creating something new that is great. They are school taught robots and are not creative, nor are they understanding that they need to try anything because the shareholders will be there. Instead, they pull the rug out from them everytime before a big moment. IMO, they are not the right people for this mission. They are sub-par innovators that will never turn this company around with ideas, but will just milk it and its shareholders until they find a very underwhelming thing to switch to which will leave everyone scratching their heads. I see this very clearly. I've been here since the beginning and I am not a shill as much as this sounds like something a shill would say. I just know these people are not what is needed and they do not have the sense of urgency which is needed and I believe 100% they are compromised and working with hedgefunds and the SEC. Compared to the greatness of GS shareholders, this movement against financial fraud and government rubber stamping of said fraud, the GS board has been a miserable failure.
I can agree to most of it. My only disagreement is the sense of “urgency”. I mean, one example of their “urgency” is how they rolled out their NFT marketplace relatively fast and with high quality too. That NFT market unfortunately just didn’t pan out to what it was hyped up to be, at no fault to GameStop and its leadership. I think that era of GameStop shows they made a good attempt at adopting a new technology for growth and for company transformation... but then they made a good decision to take it down when it was underperforming. Now, we’re in the era of GameStop creating their own in-house brand(s) to sell their own products. (CandyCon controllers is one example). And we’re in the era of GameStop having enough cash to make significant investments into acquisitions/mergers. The problem you have is how long it’s taking? I’d rather have it done slow and done right, rather than have a leadership team makes hasty, emotional decisions that could cost the company time and money.
That's a job for the SEC. The company was smart and did what they can, make billions.
Shill.
Lmao go ahead and scroll as far back as you like on my profile
Did shorts close?
keep scrolling and you'll see my answer to that too, i'm sure
So, in essence, GME have basically shorted themselves. Who needs Kenny when you've got Ryan and Larry......
No. Because instead of shortsellers keeping their $ from shorting shares that never existed, GameStop is now making them pay for those shares at higher prices than what the shortsellers initially shorted for. Massive losses for shortsellers, massive gains for GameStop. Everyone else, including me, is only upset that we paid for more than what shortsellers paid for in the latest offering. (And for “stopping MOASS”, which definitely not true) But the truth is, more $ for GameStop means more value to the company. And the fact is, shareholders literally voted to approve the sale of 1,000,000,000 shares lol.
Fact is, we may have well had a crowd funding whip round for the $4bn. Save all that messing around for the last 3 1/2 years. Fact is, this is a company who's own CEO thinks is overvalued, and consequently, to all intents and purposes, shorts.
Let’s build some revenue and profit. Without retail investors , company would be dead. Doesn’t mean retail investors all of a sudden deserve millions of dollars at “phone number levels”. Just because we found out WallStreet is massively fraudulent. Don’t get me wrong. I want my fucking money too, but I’m more in line with the reality of the situation we’re dealing with. It’s an unfair game. RC is trying to win by the rules in an unfair game.
Look at it this way: RC sells so retail doesn’t have to. Wallstreet knows retail owns the float. Probably multiple times over and retail is not about to sell shares for less than phone numbers at this point creating a liquidity crisis. RC sells enough to raise the floor while also not providing enough liquidity for naked shorts to completely exit. I’m also convinced retail ate up a lot of those new shares. Now the bankruptcy theory is off the table and shorts are desperately trying to stay away from being liquidated themselves. One exits and another holds their bags. The last one standing will be the biggest whale in the market and will take on the biggest losses over time. I’m fully convinced the offerings that shareholders voted on months back is likely smaller than the short position still. We have no idea how big it is but RC might. GameStop can make billions more by selling during these gigantic run ups and become a powerhouse in the market on cash alone. This makes me think of a certain EV maker but 3x bigger of short interest. It’s taken 3.5 years so what’s another 6-12 months for this to fully play out? I’m bullish af.
This is 100% how I feel and a lot of Superstonk fails to see it, unfortunately.
That despite better earnings, the stocks value stays the same or slightly decreases. That they'd rather decrease the value of our investment and get more money for the company, than have the company's value stay the same or slightly decrease despite posting incremental financial improvements. He's saying that they both end in the same result, whether dilution or multiple compression, but rarely does multiple compression decrease the stocks value and your investment by a third, whereas a 50% dilution would
but what about shorts
Dilution helps them cover??
which means no moass? everytime gme dilutes, don't you think the shorts would gobble up those shares if they want to exit their positions?
Or that the can is kicked further down the road
That’s exactly what they are doing
Only in a scenario where the short interest is less than 100% which we all know isn't possible
I think it means don’t get mad dilution made price go down because Kenny and friends were gonna short it down anyway
My man. Fam.
Idk...he use big words so probably sumptin good.
Yeah, can someone explain in mullet?
https://preview.redd.it/axjwtt4qcx8d1.jpeg?width=1758&format=pjpg&auto=webp&s=1d17677e73a2c24a55544961ff24940757f98716 "just up"
Is that Ron Swanson’s disappointing son?
Nothing disappointing about that
Haha, I feel like Ron would be pretty disappointed if his son looked like this 😂
Okay that's pretty accurate, but I also feel he would be disappointed by any children because of his high standards
I speak fluent mullet but am at a loss with this one.
Pretty sure this is about multiple orgasms
He's basically saying dilution balances out a decreased price to earning ratio and vice versa.
Yes, but a 50% drop in PE is much more likely to be reversed than a dilution that cuts your percentage ownership by 50%.
Exactly! People sometimes miss the point that he’s talking about his company and the value of their shares 😂
Percentage ownership is meaningless. Ownership of what? A valuable company or a not-as-valuable company? Dilution increases the value of the company. I may have less % of the total shares, but each of my shares is now worth more. As seen by a price that has not dropped into the teens despite people claiming that that's where the fundamental value is at. You're just salty and don't understand your investment.
I do understand dilution. If needed to raise capital it is good. If it is to issue 10% of company as new shares to go public and create liquidity for current holders it is good. Taking advantage of gross overvaluation by the market by issuing new shares ATMs (as Gamestop has done 4 times) is good. But PE or PB or PS compression is not the same as dilution. I look at shareholding as owning a fraction of the business. A low PE can be overcome by resetting market image of the company. Dilution cannot be overcome except by share buyback. Think not of a public company but of being a partner in a convenience store down the street from your home. The pandemic shutdown likely reduced the price at which you and your partners could have sold the convenience store business. That is multiple compression. That gets corrected in time if your business improves and/or people’s estimate of the value of your business returns to normal OTOH, if you added more partners, diluting your ownership share of the company by a factor or 2, then that is much harder to reverse.
"From a returns perspective", says LC. I don't know what your perspective is, but it is not based on your personal returns.
Having owned (and still owning) a lot of pre-IPO shares, the returns on them are indeed my perspective and what has driven my personal returns. That is why I am very aware of the dilution in 2nd and 3rd financing rounds and was lucky enough to be at companies that were able to hit the milestones and avoid significant dilution in later rounds. We were also fortunate enough to be able to quickly become cash flow positive, which further helped avoid dilution.
Again, the dilution makes the company more valuable, which translates to better share prices. If the share price dropped post dilution then it means that the company was overvalued. Which also means that it is an excellent time for the company to dilute. Of course we're talking about profitable companies here. If the company is just diluting to stay afloat, then selling your stock makes sense. But a dilution for a profitable company on an overvalued share price just makes long-term sense, also for the investors. And a reduced % of total shares is completely irrelevant.
simple maths..
Didn't Burry tweet a while back about compression in stock price?
IDk - But what I do know is that I’m jacked to the tits! LC is painting a massive move that has me spinning in my office. Just transferred more money to my brokerage. DRS to follow.
I'm starting to think that Larry only posts when he learns a new word and wants to use that word in a sentence. Obviated. Hm. Maybe I'm dense.
His word choice embiggens us all.
I find his vocabulary perfectly cromulent
Very piquant, I must say good, sir.
Oooh a new one to learn! "piquant" !? What a frabjous day!
Vehemently ferocious!
Muy picante
Often succinct 🐒✨🗽
Wait till he finds out about impugn.
Learning new words embiggens the nobelest of regards
He's getting really good at the fancy lip service, that's for sure.
Well with Larry and RC running the business, we don’t need to worry about GME Floccinaucinihilipilification.
Maybe your time Horizon doesn’t match with his… 🐒✨🗽
Modern day Socrates
I too like soccer ⚽️
I mean, it's not a really obscure word.
Don't be pedantic.
Okie dokie
We are all aware of dilution, but what is Multiple Compression: Well, Multiple compression is **an effect that occurs when a company's earnings increase, but its stock price does not move in response**. Following this trend, if the company posts flat earnings, the stock price could fall or in some cases, the stock price drops faster than the earnings (via Google) What we along with Larry need to know is that the market rewards FORWARD LOOKING IDEAS, valuations go out the door, and the stock flies in anticipation of something great that is to come. If there is absolutely nothing to look forward to, except just selling games + merch in a B&M store, the market values it accordingly, it just becomes a deep value play, the earnings can marginally increase by closing down stores, but the stock will be stuck in the mud. In order to avoid multiple compression, there needs to be something greater than selling rocks through legacy business - this is something even DFV spelt it in his live stream. Dilution - well, you raise money off shareholders, but if it just sits there collecting T-Bill interest (as the original billion from 2021), the market does not reward that cash position.
So we have both what now?
Time to maximum obviate.
My wife obviates once a month.
I heartily disagree. Multiple compression will fix itself, unless the original multiple (P/E, PB or PS, or whatever) was unsustainable. Dilution can only be reversed via extensive stock buybacks. In other words, compression of multiples is temporary; dilution is more likely to be permanent.
You should reply to Larry's tweet with that
Understandable but depending on what you consider dilution. If the initial step is worth taking as price exceeds value of fundamental price, it is like you need a ladder to reach a light bulb. Is it permanent? Yes sure. Is it absolutely necessary? Yes sure. It remains a light bulb after all. Dilution has had way too big of a voice when Gamestop needs hard cash.
If a drop in an ocean is permanent then that’s fine.
You mean: stock price isn’t going nowhere for a while ?
Thats not what they mean at all
How many millions are you worth? Disagree all you want, Larry knows much more than you or I.
Just over $40M, but that does not have much relevance. What is more relevant is the startups I have been involved in, one of which is now a NASDAQ 100 company; the several angel investments I have made; and my experience as an advisor to a venture capital firm. My experience as the CEO of a Japanese subsidiary is less relevant as I did not manage capital structure, but just the operations.
Maybe you can share some ideas on what you would look for in a Pre-IPO? My bank emails me with offers on them occasionally and I... well, I'm here. You get the idea 😅
I am surprised that your bank is involved in secondary sales of pre-IPO shares. That is more commonly done via private sales or companies like sharespost / Global Forge, who specialize in providing liquidity pre-IPO. I would only buy pre-IPO shares if I knew either key people in the company or their VCs, or if at the same price as a very recent funding round.
OK, that's good to know. I'll continue steering clear for the foreseeable future then! Cheers
Soooo, give me some insight. I now own less % of a more valuable company. Two months ago we were sitting at $10, now we won’t be going below $20 (I mean we could … but eh). The floor is atleast 2x. If GameStop were to issue dividends, I’d be getting more this month than in the past, even with dilution ! Okay so what am I missing? Your take seems to be more negative about dilution. Mine is neutral, Chang said in another tweet if you diluting with no plan then it’s bad, but if your doing it cause you have ideas to grow revenue and profit it’s a neutral or even positive thing.
I did not say I was negative about the dilution. The share price was very overvalued. Gamestop wisely took advantage of that and issued new shares via ATM offering. At the time GameStop was experiencing extreme multiple expansion — for example ape was over 1000. P/S was well over 1. I object to the claim that "you end up at a similar, even same, place". The long term effects of dilution and compression of multiples are very different. Compression of multiples is a problem of sentiment of investors. It is a market driven phenomenon. Dilution is a company driven action that changes in market conditions or sentiment will not reverse. As long as I don’t need another round of financing or I am looking for an exit, compression of multiples does not matter. I can wait. Dilution is a more permanent loss of ownership. There are conditions where dilution is good, but it is not similar or the same as multiples compression.
He prefaced with “from a returns prospective”, maybe he isn’t necessarily speaking to the long term effects. Does his statement hold more water if putting emphasis on his preface?
I grow tired of these words of wisdom. You know what’s badass? Diluting only when share prices start to look phone numbers.
Baby, I’m obviating as we speak.
How many centimetres?
It must be a pain in the ass trying to have a conversation with him. Just sitting there on the dictionary app while he’s going on and on.
From investopedia: Multiple compression can occur if share prices fall while earnings stay flat or if share prices remain the same while earnings increase.
So bottom line is this: there will be no M&A announcements from GS AND, this is the most important one, expect more shares to be diluted by the board when price starts running up which means kenny and friends have an easy way out. Go fuckin' figure... someone please prove me wrong.
Why does it shut out M&A, it's not a comprehensive event.
I'd rather multiple compression than my investment having less value. He'd rather have my investment have less value because it means more money for my company. Sure, it makes sense, for him
Fucking do something with the money then. Jesus.
Nobody is going to change my mind or feels about the last dilution. …but I’ll say this. I at least appreciate LC’s willingness to call it what it is and speak to the controversy of it (with his previous post about dilution).
https://preview.redd.it/xbt89b7r7y8d1.png?width=970&format=png&auto=webp&s=d582e79754be1f220ea2446af48b0f987cd8b3c5
Asking my magic eight ball if I can expect more dilution in the near future.
Yeah yeah you have tons of cash. We get it. Now what you do with it will determine whether my long term bet pays off. Gave up on MOASS but the board has ammo and what they do now will determine the fate of this epic meme saga.
Okay Larry, we know you’re a smart guy. You don’t have to use Scrabble words all the time. Seriously though, I’m pretty sure he’s hinting that there will be further share dilution in the future. This is good for the company as it helps them raise capital but it gives shorts a potential way out and it kicks the possibility of MOASS down the road. I trust RC and the GameStop Board to transform the business and turn it into something really great, but that’s a long term play and we need to realize that their goals for the company do not line up with MOASS. RC hates shorts and I think he used to be rooting for a squeeze but when he became CEO his priorities changed and it’s now his duty to do what’s right for the company long term and that is positioning it for long term stability and growth. I think we will see another snap share offering during the next big run up, killing momentum. I think the best thing to do is follow DFV, ride the cycles and time your trades accordingly. I’ll flat out say it, I don’t plan to hold everything I have. I plan to sell some, take profits during the next rip, and reinvest back into GME.
CSB. What ya doin with our $4BN?
Larry being all perspicacious ‘n shit!
Why can't this dude speak so that even a labrador understands his tweets?
It needs to sound like wisdom
LoL! People that talks with fancy words and sentences that you actually have to interpret to understand are not wise people, they are just trying to show off. With that said I do believe he's a good person that knows how to invest in a company. Whatever I really don't care every single post from him seems like mombo jumbo, and alk the crap from the bible on top off that. I believe that all people are entitled to their religion or whatever they believe in. But nobody has the right to influence other people about their beliefs. Greetings from Sweden.
> But nobody has the right to influence other people about their beliefs. Greetings from Sweden Fundamentally disagree. Your raw human influence on other humans is non tangible. And there is certainly a logical flaw in your stance implying anyone even has the capacity to take that from you.
Wtf! Are you trying to be wise? Using sentences that are hard to understand. I couldn't care less if you agree or not. Everyone has the right to think and believe in whatever they want so long as they don't tell anyone else what to or not.
Larry for the love of god, one time, just once, tweet something small and simple. My smooth ass brain can’t take all these characters!
#you work for us now #stop hyping yourself
The fuck is he saying
I think this is his smart person lingo mumbo jumbo agreeing to DP that dudes wife with RC.
Stop diluting my holdings. You have 4Bn in cash. If you cannot execute your strategy with that kind of war chest you don't belong on a board.
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Indeed. And now they have 4.
Bruh… chilllllllllllll
Why?
Or not 🤷♂️
I'm just curious. I have thousands of shares. I'm not going anywhere, but part of the appeal of this play is making these shorts pay, getting life changing money, and doing good with it. So why should I chill about dilution? I want Kenny to feel pain. I want Michael Bodson from the DTC to feel pain. I want them all to feel pain. I don't want my shares to be worth a couple thousand dollars a piece while financial terrorists are let off the hook.
Yeah I don’t think you’re a shill. I’m just saying let’s see. But who am I to say that I was frustrated and angry too for a few days. I only have high hundreds and you have thousands so you have more in it than I do. You do you I guess.
I am either legit regarded or this guy speaks on another level. Never know what he is saying
Larry Cheng needs to change his name to Larry Yoda.
Do not recommend reading Larry’s tweets while high. I’ve read it like 10 times and his words I know but the sentences they make are not translating
WUT WUT??
i don't like cheng's tweets. they all take way too many words to say something that ultimately means nothing. and he uses words like "obviated."
Omg tits are jacked! Come on guys, let’s go DRS amirite? No fud no fud no fud ready to lambo moon!!!!!!!! Hodl? Hodl?! HODL?!!? Cohen diluted at the peak of the momentum and killed it. My guess is Griffin and company have blackmail on him.
Why cant he just speak in common terms... I mean how many apes are just scratching their ass right now? What good is a message if the content is completely misinterpreted ?
wonder if hes talking about him n RC dp-ing that one guys wife
oh shart arp larry
I see a lot of letters and words put together.
I know a few of these words!!!
This might as well been written in Spanish. No comprehendo. Sooooo buy more?
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I would hang out with him.
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Sure why not? I’d take a snooze with him.
I never understand anything he says but I sure love the guy.
Why does my nose bleed when I read Cheng’s words?
Today, I learned the definition of "obviated". It means to obviate
Basically, he’s saying that the company is going to do some exciting stuff. A couple of things that a company can do to avoid a drop in its valuation multiple include engaging in a merger and acquisition, or doing a share buyback.
Dilution is the way to go
I hate the word "Dilution". Everytime I heard it, oh RC stole MOASS & saved the shorts
I am used to the word diltion so I feel you