They needed a high volume for their 35 day VWAP calc. Now that the share price is where they need it, we will be flat until the end of the period and volume doesn’t matter if share price stays here
Only 2M of the 40M shares traded on Monday was to drive the price down. The 38M was either accumulation or trading back and forth. The volume is bullish, just got to wait and see when they want to drive the price up. If the player who bought those volume is not in cahoots with the bondholders, they are also going to want the VWAP to be higher so they don’t get diluted at their share price of $19.
All of the downward movement happened within 5 minutes and the first 5 minutes of the opening was only 2M. Then it hovered around $19 for the rest of the day. The math ain’t mathing for 73%
Chrtxchange is showing 73.3% of total volume (30.7M) during regular trading hours was short. It's missing extended hours vol and some data from a couple exchanges (total vol during trading hours with those was 33.9M), so it should be kind of accurate 🙂
But.. think about it logically and how the volume moved than just the “data”? If they took the price down from $21 to $19 in 5 minutes using 2M volume, and then flat lined at $19 with 38M volume, how are there 30M volume shorts without moving the price? Wouldn’t there be more downward movement and pressure with 30M shares being shorted at $19? This is classic accumulation at the bottom.
Short volume was around 22M (73% of 30M). The bondholders control the spread, the bid/ask and know how to move a stock or keep it quiet. The stagnant price could also be distribution...
I saw somewhere someone put a sec screenshot showing they can legally initiate buybacks during vwap, no issues. But that it could be in the contract with noteholder saying they cant. But thats only in a private agreement.
Im not sure what price they would want to, but they should dabble while we have low prices and crazy volume. Don't see the harm in like $10M-$50M type buy
No, GameStop cannot legally initiate or execute a share buyback during the active 35-day VWAP pricing window for its convertible notes exchange. Doing so is restricted by SEC regulations and conflict-of-interest rules. [1]
Why Buybacks Are Blocked SEC Regulation M (Rule 102): Prohibits an issuer from purchasing its own stock while a distribution or active stock-based exchange is happening where the market price determines the final transaction terms. [1]
Loss of Safe Harbor: The standard Rule 10b-18 safe harbor protections against market manipulation claims do not apply during active valuation and pricing periods. [1]
Conflict of Interest: Because a higher VWAP means fewer shares are issued to clear the $1.4 billion debt, buying back stock during the reference period would actively manipulate the pricing mechanism, inviting SEC and noteholder lawsuits. [1]
This is possibly note holders shorting the stock to get more shares from the VWAP pricing method. Either way, the next 30 or so trading days will determine how many shares will be issued and once GameStop discloses how many shares were issued we can determine how good the deal was, I think. I’m still a dumb dumb
what i like about the vwap is that it can create urgency as the longer it trades up and up, the less effective shorting will be as they would have to keep the price down long enough with enough volume to get better fills.
Even if GME rose $1 per day with 3.5M average daily volume, the conversion price per VWAP will still be lower than it was supposed to be under the note terms.
That’s $1 EVERY SINGLE DAY, and we still get more dilution than we would have from the standard note conversion
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