Deep F______ Value

[brobro777]

7 hours ago, FCharlie said:

 

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.

 

 

One of the more fascinating things I saw in my life was this trader shorting Providian Financial (PVN) over 20 years ago. He started shorting off the open around $103 and kept adding until he got squeezed out around $115 for a big loss. Of course that was the high and the stock sold off the rest of the day for UNCH. And of course PVN subsequently sold off to $1 or thereabouts, with the company mired in class action lawsuits. Of course. 

 

TV shows and movies from Hollywood? That's drama? Haha come on

 

[Vish_ram]

Here is a path to $100BB MCAP for GME, a 10X from here

 

1) Invest all cash in BTC

2) keep closing unprofitable stores

3) run a bare bones operation

4) issue stock/bond/convertibles periodically and go back to 1. 

[wescobrk]

48 million shares traded in less than an hour.

[ValueArb]

18 hours ago, wescobrk said:

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

 

$32 now. It would be obviously rational for Cohen to drop another ATM at any time its trading above $20, I doubt GME is worth $15 even with $10/share in cash. But I'm wondering if the soft factors will prevent him doing another ATM quickly. Dropping one more before the 21st is going to look bad from a PR perspective, not just to the apes, but to mainstream media it looks like taking advantage of clueless retail. And it looks like he's targeting Gill's option position and trying to bust him.

 

But if it breaks over $40 again all bets are off. I think @whatstheofficerproblem nailed the long term goal. Ryan will invest GME in other businesses while just winding Gamestop down at break-even. He'll build his own mini-berkshire to run for the rest of his life, so any opportunity to increase his capital base he'll take. He's going to do more ATMs this year if the cult gives him the opportunity. 

 

My bet is GME has more than $15/share in cash by end of year. 

Edited June 12 by ValueArb

[wescobrk]

 Valuearb, that makes sense except ( see another scenario that if roaring kitty disappears for another 3 years (or forever since he is worth over half a bil) I could see cohen doing another ATM but at a lower share count.

if I were him that is what I would do.

we will see.

did you see that quote from citron? ‘An jnsult to capital markets”

give me a break, you shorted for a measly few days and lost money so quit your bitching snd take it like a man, roaring kitty kicked your ass 3x.

[aws]

There was almost 100k contracts of the 20c traded today, with huge blocks dumped on the bid near the close. Since DFV was the majority of the open interest it's not a big leap to assume he is dumping.

[wescobrk]

That has to be him.

Cohen has to be thrilled if this thing holds in the mid 20’s and kitty is out.

tomorrow will definitely be interesting.

[matthew2129]

This thing isn't staying in the mid 20's once its confirmed DFV is out. My guess is Cohen issues a special dividend of ~ $5 per share once its trading closer to $15. Too much of Cohen's net worth is tied up in this thing, but he doesn't want to sell for appearance purposes so a special divy is the best way for him to cash out of this clown car show

[wescobrk]

I wouldn’t be surprised if it stays in the mid 20’s to see 20-40 million ATM within the next five days.

we will see if Keith keeps posting tomorrow.

[brobro777]

So GME: 1. has a terrible business that's not turning around; 2. sold a metric ton of additional stock, diluting like crazy; and 3. the original pumper DFV is probably out. And the stock didn't puke out to below $10 already?

 

That sure is puzzling, haha

 

 

[ValueArb]

2 hours ago, aws said:

There was almost 100k contracts of the 20c traded today, with huge blocks dumped on the bid near the close. Since DFV was the majority of the open interest it's not a big leap to assume he is dumping.

 

That's not his style, he's the ride or die leader of the movement and it seems unlikely he would nuke his reputation that way when his history is taking enormous risks and not bailing on his followers. He held his shares/options way far past the squeeze in 2021 and just bought more shares. CNBC had a story today that i think nailed what he'll do, he'll cashout the options and put proceeds directly into shares. At $26 he can get close to 3M more shares.

 

All of this of course assumes he wasn't using margin/leverage to buy his current holdings. If thats the case then heck yea, he's got to be the seller, he panicked thinking he was on verge of a huge loss and decided he liked money more than adulation of a bunch of smelly apes posting from moms basement.

 

1 hour ago, matthew2129 said:

This thing isn't staying in the mid 20's once its confirmed DFV is out. My guess is Cohen issues a special dividend of ~ $5 per share once its trading closer to $15. Too much of Cohen's net worth is tied up in this thing, but he doesn't want to sell for appearance purposes so a special divy is the best way for him to cash out of this clown car show

 

That might provoke an investigation. The SEC can't stand by while companies sell stock in a pump then pay themselves massive dividends from the cash shortly afterwards. Cohen would have no credible explanation for why GME's capital allocation plans changed so radically so quickly other than exploitation.

 

And Cohen's basis is over $25/share on 36.8M shares, after tax proceeds from a $5 dividend isn't moving the needle much for him and isn't reducing his risk.  As long as he can keep Gamestop running at break-even by downsizing ruthlessly over time his downside will remain capped at $10/share in its net cash, and he keeps the optionality of an actual turnaround of GameStop bailing him out. He can also grow cash per share slowly over time with more well timed ATMs and interest earnings, or canny acquisitions (if he's capable of making any).

 

It is sounds weird that he had GME sell 45M shares at $21 last month when his basis was significantly above that, but that first tranche was securing the safety of his investment. From now on he should just drop ATMs north of $25 so he can increase the value of his holdings. 

 

49 minutes ago, wescobrk said:

I wouldn’t be surprised if it stays in the mid 20’s to see 20-40 million ATM within the next five days.

we will see if Keith keeps posting tomorrow.

 

Until Keith reports he sold, I think Cohen's hands are tied till after Gill's options expire on the 21st. Ryan should want to keep Keith afloat and fanning the fire of his followers. He doesn't want to accidentally force Gill's account into liquidation (if he's heavily margined) or a huge loss, he wants to maintain Gill's appearance of invulnerability so he keeps the apes in a frenzy so GME can keep dropping ATMs at absurd prices for months more.

[wescobrk]

@ValueArb you could definitely be right, I see your logic, how does cohen know if he has to wait 3 years to turn on turn money printing machine again?

Maybe roaring kitty has a taste of becoming a billionaire and he will be back before year end and cohen doesn’t want to kill the goose that is laying the golden eggs.

[gfp]

Well roaring kitty has definitely started exiting his 20 strike options contracts, either by selling or exercising, because the open interest in that contract is now lower than his previous position size.  Quite a few contracts traded yesterday at the close, which would give him a profit on those.  I wouldn't want to hold them over the weekend if I was him - so maybe he finishes the options contract exit this week and lives happily ever after as a member of the nine figure club.

 

Does anybody know if this is a taxable account?

[wescobrk]

I don’t know but I would assume it is taxable at least for his options account so the government would share in his losses.

it wouldn’t surprise me if his shares are in an Ira as I do believe he is a sharp guy, but I have no proof and just speculating.

[gfp]

18 minutes ago, wescobrk said:

I don’t know but I would assume it is taxable at least for his options account so the government would share in his losses.

it wouldn’t surprise me if his shares are in an Ira as I do believe he is a sharp guy, but I have no proof and just speculating.

 

Everything is in one account at E-trade.  He can trade long options positions in the account even if it was an IRA.  There is a cash balance, not on margin.

[wescobrk]

13 minutes ago, gfp said:

 

Everything is in one account at E-trade.  He can trade long options positions in the account even if it was an IRA.  There is a cash balance, not on margin.

Understood, snapshot looks like one account.

seems like crazy risk to buy all of those options in an Ira but he obviously has huge risk tolerance so he will have to wait 21 years to collect on this account unless he does a 72t, if it is an Ira.

[ValueArb]

1 hour ago, gfp said:

 

Everything is in one account at E-trade.  He can trade long options positions in the account even if it was an IRA.  There is a cash balance, not on margin.

 

That would pretty much sink my logical scenario. Its possible he borrowed a ton of money outside of his account and funneled it in for this trade, but seems unlikely as convincing someone to lend him as much against his E-Trade account seems way harder than just using margin. 

 

That would mean his account balance actually represents close to his net worth. So maybe he did make a 9 figure score in Solano?

 

Or Solano in combination with a big GME trade in early May? Maybe he bought a ton of $10 calls in April, then sold them for after he posted his memes? I don't know how to get historical option pricing/volume for expired options but looking at the June 21 $10s on Yahoo there was huge volume spike at $1.50-$1.75 on April 21, and a ton of volume May 12-13 selling between $16 to $44 during the first spike.

 

I imagine that May expiration $10 options were even cheaper in April and spiked even higher in May.

[gfp]

11 minutes ago, ValueArb said:

 

That would pretty much sink my logical scenario. Its possible he borrowed a ton of money outside of his account and funneled it in for this trade, but seems unlikely as convincing someone to lend him as much against his E-Trade account seems way harder than just using margin. 

 

That would mean his account balance actually represents close to his net worth. So maybe he did make a 9 figure score in Solano?

 

Or Solano in combination with a big GME trade in early May? Maybe he bought a ton of $10 calls in April, then sold them for after he posted his memes? I don't know how to get historical option pricing/volume for expired options but looking at the June 21 $10s on Yahoo there was huge volume spike at $1.50-$1.75 on April 21, and a ton of volume May 12-13 selling between $16 to $44 during the first spike.

 

I imagine that May expiration $10 options were even cheaper in April and spiked even higher in May.

 

Yeah I would be highly surprised if his posted e-trade accounts do not represent almost 100% of his net worth and I do not think he is staked or financed in any other way.  He keeps some cash there.  The options provide the leverage.  He had several years to make a return on his $30 million from the first pump.  He turned whatever that figure was into $200 million by June 1st.

 

Everything is going to be fine.  He's having a good year.

[wescobrk]

I’m reading he exercised another 4 million shares so now he owns 9.1 million shares!

[ValueArb]

12 minutes ago, wescobrk said:

I’m reading he exercised another 4 million shares so now he owns 9.1 million shares!

 

OK, so he sold his options to buy shares, that math seems to work out pretty closely. 12M options at $10 approximately equals 4M shares. And it makes sense he's not dumping, he never has before.

[wescobrk]

He will probably hold for another run up but if he has 100 percent in Gme then he can’t buy more if there is a big drop, well he does have six million but that is low,single digit percentage of his liquid net worth.

[gfp]

 

Not 9.1m shares, 9,001,000 shares.  He got out of his options contracts and still has a $268m net worth.  I don't think this is as dire as some of you guys were going on about.

[wescobrk]

Definitely not dire taking 53k into 268 milllon!

in four years!

[wescobrk]

I was wrong about another ATM. Doubt we will see one while Keith has virtually all of his net worth in the common.

probably range bound from 20-30 for the foreseeable future.

[ValueArb]

15 hours ago, wescobrk said:

Definitely not dire taking 53k into 268 milllon!

in four years!

 

Quote

 

In December 1992, after losing his entire bankroll, Karas drove to Vegas with his car and $50 in his wallet. After arriving at The Mirage, Karas recognized a fellow poker player from Los Angeles and convinced him to lend him $10,000. Karas quickly turned the loan into $30,000 playing $200/$400 limit Razz.^[3] Karas paid $20,000 to his backer, who was more than content.^[5]

With a little over $10,000 in his pocket, Karas went to a bar with a pool table adjacent from^{[clarification needed]} the Liberace Plaza on East Tropicana. There he found a wealthy and respected poker and pool player. Karas refused to reveal his name for the sake of his opponent's reputation; he simply referred to him as "Mr. X". They started playing 9-ball pool at $5,000 a game, raising the stakes as time went on. After Karas had won several hundred thousand dollars, they raised the stakes to $40,000 a game. Many gamblers and professional poker players watched Karas play at stakes never seen before. Karas ended up winning $1,200,000. The two decided to play poker at Binion's Horseshoe, where Karas won an additional $3,000,000 from Mr. X. Karas was willing to gamble everything he had won and continued to raise the stakes to a level few dared to play at.^[6]

With a bankroll of $4 million, Karas gambled his bankroll up to $7 million after spending only three months in Las Vegas. By now, many poker players had heard of Mr. X's losses to Karas. Only the best players dared to challenge him. Karas sat at the Binion's Horseshoe's poker table with 5 of his 7 million dollars in front of him, waiting for any players willing to play for such stakes.^[7]

The first challenger was Stu Ungar, a three-time World Series of Poker champion widely regarded as one of the greatest Texas hold'em and gin rummy players of all time. Ungar was backed by Lyle Berman, another professional poker player and business executive who had co-founded Grand Casinos. Karas first beat Ungar for $500,000 playing heads-up Razz. Karas then played Ungar in 7-card stud, which cost Ungar an additional $700,000.^[7] The next player was Chip Reese, widely regarded as the greatest cash game player. Reese claims that Karas beat him for more money than anyone else he ever played. After 25 games, Reese was down $2,022,000 playing $8,000/$16,000 limit.^[7]

Karas continued to beat many top players, from Puggy Pearson to Johnny Moss. Many of the best players would not play him simply because his stakes were too high. The only player to beat Karas in the first round during his run was Johnny Chan, who beat him for $900,000, though Chan lost to Karas frequently, before and after the streak. By the end of his six-month-long winning streak, Karas had amassed more than $17 million. Karas said that Doyle Brunson was the only player able to beat him at Razz during his winning streak.^[8]

The poker action for Karas mostly dried up due to his reputation and stakes. He turned to craps for $100,000 per roll.^[4] Karas was allowed to make pass line and come bets of up to $300,000, but with no odds.^[9] Jack Binion capped Karas' buy bets on the 4 and 10 at $100,000. At one point, Binion raised Karas' 4 and 10 buy bet limit to $200,000. Karas quickly won $920,000 under these conditions; then Binion immediately lowered the limit back to $100,000.^[9] Karas said that he could quickly win $3 million on dice, while it would take days to weeks with poker. Karas stated, "with each play I was making million-dollar decisions, I would have played even higher if they'd let me."^[3]

Transporting money became a hassle for Karas, as he had several million dollars in his car every day. He carried a gun with him at all times and would often have his brother and casino security guards escort him. At one point, Karas won all of the Binion's casino's $5000 chips, the highest denomination at the time.^[10] By the end of his winning streak, he had won over $40 million.^[11][12]

Downfall

Karas's odds-defying two-and-a-half-year streak came to an end in 1995 when he lost most of his money in a period of three weeks. He lost $11 million playing craps and then lost the $2 million he won from Chip Reese back to him. Following these losses, he switched to baccarat and lost another $17 million, for a total of $30 million. With approximately $12 million left and needing a break from gambling, he returned to Greece. When he came back to Las Vegas, he went back to the Horseshoe, shooting craps and playing baccarat at $300,000 per bet, and in less than a month, lost all but his last million.^[13]

With his last million, he went to the Bicycle Club and played Johnny Chan in a $1,000,000 freezeout match. This time, Chan was backed by Lyle Berman, and they took turns playing Karas. He preferred playing both of them, instead of just Chan, as he felt Chan was the tougher opponent. Karas won and doubled his money, only to lose it all at dice and baccarat, betting at the highest limits, in just a few days.^[13]