gfp Posted June 10 Posted June 10 For those following along at home, he still has an account balance of $235 million. He probably didn't have a 9 figure net worth 60 days ago. Does anybody who follows these stories closer than I do know if this was supposed to be an IRA or a taxable account he posts?
schin Posted June 11 Posted June 11 13 hours ago, Saluki said: I hate to chime in on this because it's a very complicated area of law, and I don't do it anymore, so I am wary of giving bad information. However, this infuriating video gives a pretty good explanation of how this stuff happens, and why it's hard to bring cases against these dirtbags. Towards the end of the video, he mentions a legal theory that was used a lot in prior cases to sue people for this type of behavior. He doesn't mention what it's called, but if you want to read up on it, it's called the "fraud on the market" doctrine. Basically, you don't have to identify specific persons who were defrauded because you defrauded the market by disseminating false information or did other things to manipulate the stock price. @Saluki - So, what is the final line between this pump and dump and what they do in the movie "Boiler Room" or early "Wolf of Wall Street" staff? That's crazy. It just promotes bad behavior.
wescobrk Posted June 11 Posted June 11 14 hours ago, ValueArb said: Ok, my math was off a bit from an incorrect assumption. I thought the May 17 offering announcement was after hours, but it was before, so the actual percentage of shares sold over the 6 days was around 14%. And also the closing price the day before was $27, so it did seem to have a strong effect on the price over those 6 days (ending at $19). When do you think the company willbe finished with the 75 million shares? Maybe Monday, June 17th?
Saluki Posted June 11 Posted June 11 9 hours ago, schin said: @Saluki - So, what is the final line between this pump and dump and what they do in the movie "Boiler Room" or early "Wolf of Wall Street" staff? That's crazy. It just promotes bad behavior. I don't think there is a difference. And they may re-file against those defendants. When they charge you with something, they have to cite the statute (or federal regulation), then show how you violated it. When they charged these guys, their case was submitted using the "right to control" test, which was easier to prove than the "fraud on the market" theory. Because a higher court said that the "right to control" test is not how you should determine if someone broke the law, they had to dismiss the case, but they can be charged again as long as the statute of limitations doesn't expire.
ValueArb Posted June 11 Posted June 11 1 hour ago, wescobrk said: When do you think the company willbe finished with the 75 million shares? Maybe Monday, June 17th? Volume has been so high that I would be surprised if they aren't close to done now, 310M shares traded over Friday/Monday. Price is still so high at $24 that I wouldn't be surprised if they announced another ATM.
FCharlie Posted June 11 Posted June 11 51 minutes ago, ValueArb said: Volume has been so high that I would be surprised if they aren't close to done now, 310M shares traded over Friday/Monday. Price is still so high at $24 that I wouldn't be surprised if they announced another ATM. I see 450 million shares traded since the 75 million ATM announcement. I'm not sure if they would have been legally allowed to start selling at 9:30am Friday but if they were I'd wager they are basically finished by now. The real question is, what will they do with $3 or $4 billion of cash and no debt? The stock has such a cult following that if the cash were used to make external investments it would probably spark another round of excitement and buying from the APE's. At a minimum, interest income will rise significantly and could overpower operating losses.
ValueArb Posted June 11 Posted June 11 (edited) 58 minutes ago, FCharlie said: I see 450 million shares traded since the 75 million ATM announcement. I'm not sure if they would have been legally allowed to start selling at 9:30am Friday but if they were I'd wager they are basically finished by now. The real question is, what will they do with $3 or $4 billion of cash and no debt? The stock has such a cult following that if the cash were used to make external investments it would probably spark another round of excitement and buying from the APE's. At a minimum, interest income will rise significantly and could overpower operating losses. I need to stop doing math in my head. IB's trading history page for GME tells me that 183M traded Friday, 101M traded Monday, and 55M so far today, which is just under 350M. And clearly they were able to start trading first thing market open Friday, that's why they rushed out their financial update and the ATM prospectus update/announcment pre-market. Otherwise they would have waited to announce after hours. The prospectus lists 426M as their likely outstanding shares post ATM offering, up from 300M before the May offering. Again I think its likely they'll do more, but assuming they stop after this one they'll have roughly $4.3B in cash (assuming a $30 average sales price for second ATM) or $10/share in cash and slightly more than that in book value. They could end up with 500M shares if they pop another ATM this month, at over $21/share that would be close to $6B, or $12/share in cash. Either way this is a pretty massive increase in share count, which should make it even harder to manipulate by that motley crew of reddit apes. And they'll all be sitting with egg on their face after this attempt went south, so their credibility should be significantly damaged just like Gills is now. The smarter ones have to realize that a short squeeze is now forever impossible as Ryan Cohen is just going to milk any pump for cash. But on twitter a bunch were complaining yesterday about "hedge funds" and "market makers" manipulating the stock because the first after hours trade was over $40, then the price rapidly returned back to $25. So it seems obvious that it was an ape still trying to manipulate (someone waited for low volume after hours to paint the tape with a tiny trade at a high price hoping it would spark a frenzy), and still blaming others for whacky conspiracy theories, so who knows what will happen when Cohen actually buys a new business with all that cash. Edited June 11 by ValueArb
wescobrk Posted June 11 Posted June 11 Valuearb, thanks for the post, what is a realistic short a percentage of the current float? last time I checked yahoo finance it showed 29 percent but that doesn’t sound accurate as you argue in your post. so maybe range bound in the 20’s is possible for several weeks as you indicate long and short could be frustrated?
Vish_ram Posted June 11 Posted June 11 The most rational thing for roaring kitty to do is to pick a series of undervalued stocks and do the pump/dump. He could've become a billionaire. what a missed opportunity!
wescobrk Posted June 11 Posted June 11 Yes, but the stock is at 28, I’m guessing he made close to half a billion since April! this is a guy that lived in a rental house four years ago and had 53k!
wescobrk Posted June 11 Posted June 11 (edited) Even if it takes two years for the next setup like this he could come back and make a few billion. maybe Netflix will make dumb money part 2. Ha. Edited June 11 by wescobrk
wescobrk Posted June 11 Posted June 11 Complete random comment but no one has broken his track record at high school since 2009. Sometimes non fiction is more entertaining than fiction.
wescobrk Posted June 11 Posted June 11 Quote We will see if Ryan does another ATM since it is above 30, if so, maybe another retrace to 22. i thought we would see this happen, tomorrow will be interesting! im hoping for another retrace into the mid 20s
aws Posted June 11 Posted June 11 It's pretty impressive how quickly it they dumped all those shares on the market. 25% dilution in three days and so soon after the last sale. They should have about $10 of cash per share now. The only involvement I've had with GME has been shorting OTM puts, so good to know those will be a lot safer now.
wescobrk Posted June 11 Posted June 11 Entertainment value only for me, I would have probably sold everything when I had 10 million which is the reason I’ll never exceed that figure.
brobro777 Posted June 11 Posted June 11 41 minutes ago, aws said: It's pretty impressive how quickly it they dumped all those shares on the market. 25% dilution in three days and so soon after the last sale. They should have about $10 of cash per share now. The only involvement I've had with GME has been shorting OTM puts, so good to know those will be a lot safer now. Yea the supply was completely absorbed and the price grinded higher to $30 It would be hilarious if GME hits $100 sometime this year Haha
FCharlie Posted June 12 Posted June 12 31 minutes ago, brobro777 said: Yea the supply was completely absorbed and the price grinded higher to $30 It would be hilarious if GME hits $100 sometime this year Haha It would also be hilarious if GME authorized a new ATM and a share buyback at the same time and just played the volatility, totally willing to issue or repurchase shares depending on the madness of the market participants
Spekulatius Posted June 12 Posted June 12 (edited) 1 hour ago, FCharlie said: It would also be hilarious if GME authorized a new ATM and a share buyback at the same time and just played the volatility, totally willing to issue or repurchase shares depending on the madness of the market participants I thought the same thing. It would be a Teledyne supercharged by the volatility due to the fickle shareholder base. Of course Teledyne had a soIid underlying business which GME has not. Edited June 12 by Spekulatius
whatstheofficerproblem Posted June 12 Posted June 12 So what's the end game? What will they do with all the money they raised from diluting the shit out of shareholders? I can't see any scenario other than this being a dud.
FCharlie Posted June 12 Posted June 12 17 minutes ago, whatstheofficerproblem said: So what's the end game? What will they do with all the money they raised from diluting the shit out of shareholders? I can't see any scenario other than this being a dud. No idea what they will do with the money but I'm not sure diluting the shit out of shareholders is such a bad thing. I'm looking at the 10Q that came out today. The balance sheet equity was 1.307 billion and shares outstanding as of June 5th was 351 million. After doing the math for the 75 million shares sold for $2.1 billion cash and the 45 million shares sold for $930 million, balance sheet equity should now be $4.3 billion and shares outstanding about 426 million. Book value per share just nearly nearly tripled. The stock is still trading at a premium to book value so if you view this as just a melting ice cube the stock should drop by 50%-60%. But none of that matters if GME uses the new cash to make external investments because the APES will probably get excited and start buying calls on GME and also probably buy calls on whatever GME invested in which would just levitate the value of GME's investments. It's truly fascinating to watch this and it makes me really appreciate the fact that the stock market exists for all of us to enjoy. I mean, think of all the people out there who search the TV or scroll Twitter or Instagram looking for something to entertain them and we get this nonsense served right up on a silver platter to entertain us.
thepupil Posted June 12 Posted June 12 57 minutes ago, whatstheofficerproblem said: So what's the end game? What will they do with all the money they raised from diluting the shit out of shareholders? I can't see any scenario other than this being a dud. i mean the end game is to issue as absolutely much as they can while there stock is where it is. I'd view it as absolutely devastating those who were short @ prices pre this most recent run. they just massively increased intrinsic value per share (assuming they don't completely incinerate the cash).
Stuart D Posted June 12 Posted June 12 The end game is rolling 5% treasuries, issuing stock when at a premium and repurchasing when trading at a discount. Close all stores. Layoff all employees. Hire roaring kitty to head up a pump and dump business unit. It’s already a meme stock, might as well make the company a 100% trolling operation.
whatstheofficerproblem Posted June 12 Posted June 12 (edited) 3 hours ago, Stuart D said: It’s already a meme stock, might as well make the company a 100% trolling operation. I think they can technically keep issuing and raise cash, close all stores, layoff all employees and rename themselves to GME from Gamestop. Then poach some talent from KKR, Apollo, PJT Partners etc etc and use the raised capital for private equity endeavors essentially transition into a PE company, because raising money seems easy for them. Instead of saying they are issuing shares, they can just say [GME Partners I] fund has successfully finished fundraising. Edited June 12 by whatstheofficerproblem
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