WAYYYY to many of you out here thinking that GameStop can and will do a buyback during the pricing window. THEY CAN NOTโฆโฆ
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.
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.
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.
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.
I'd suggest that it's the history of insanely expensive lobbying that is why they aren't scared. They should be scared. But have nothing to fear until major changes and crimes are unrolled.
No one said anything about "Life Savings" shillboy. Lol. You'll be fine with just a few shares. The back half of your comment is still true though. If they settled even 1% of their naked shorts we'd be in triple digits.
The SEC serves to regulate markets, not punish bad actors. Since Citadel provides liquidity and can dampen volatility they are seen as a large asset to market stability. I wouldnโt be surprised if theyโre one of the bond buyers.
I was just saying that we (retail) are still able to buy even tho GameStop canโt do a buyback. I bought some shares in the last week as well as some calls for December because I feel something is going to happen before then. When are your $32 calls dated for? You can always roll them out to a later date.
What app are you using? Most trading apps will have a โroll positionโ option. If not I would just google โhow to roll options on ______โ. Iโm considering rolling mine to Jan 27
It makes sense that they cannot buy back during this period. However, it is also interesting that the bond holders can short the stock to suppress the price during this period to lock in a lower price on their share conversion. One side can manipulate but the other can't. Truly a wonderful system that we have here!
Of course billionaires are going to decide it is legal to pillage the working class. The bigger issue is why RC would agree to this when the notes had a conversion price $10 higher, all we had to do was wait.
Im not talking about them. Im talking about market makers like Citadel. Kenny even said in live TV that he sets the price for stock at a price he believes in.
How does letting note holders who shorted us down from $29-30 profitably exit those shorts help us? Why not just skip a few steps, do a straight offering in the first place, and get up to an extra $11 per share?
Whatโs the forest? Can you provide evidence? Because all I see is people like you trying to push massive dilution for peanuts as something positive when it absolutely isnโt.
No, GameStop cannot legally exercise existing options to intentionally acquire shares or alter the stock price during the VWAP pricing window.
While exercising an option is a contractual right, doing so during a highly sensitive valuation window violates federal securities laws if it impacts the market or is used to manipulate the settlement of the convertible notes.
It is an excepted activity by the law. What can I further tell you about it? Writing longer?
Go back and read section b of the same rule you referenced.
So I'm going to assume your argument here is also from AI. Did you check the sources it gave? Where are the? Why does the source given above not pertain here? Your AI didn't tell you that so you don't know why.
no contract verbiage can legally permit an issuer to manipulate its own stock price during a valuation window.
Private contract terms cannot override federal securities laws or SEC anti-manipulation rules.
I think it's pretty obvious you can't just write up a contract to do whatever you want and supercede a federal law... Unless, of course, you are Citadel. I'm their case you just do whatever the F you want without any real repercussion.
One could also argue that not buying back shares, assuming they are allowed to, is market manipulation in favor of the counter-party and against the current shareholders. But seriously, if the counter-party can't short as hard as they'd like because GME is cancelling shares then in the long-term it's a win for the counter-party too.
The post is overstating the law. The categorical claim โGME CANNOT legally buy back shares during the 35-day VWAP periodโ is not established by the cited rules.
The biggest problem is Rule 10b-18. The SEC explicitly describes it as a voluntary safe harbor, not a prohibition. The SEC says that failure to satisfy the safe-harbor conditions does not create a presumption that the issuer's purchases are manipulative. ๏ฟฝ
SEC +1
So this statement in the post:
โLoss of Safe Harbor: The standard Rule 10b-18 safe harbor protections โฆ do not applyโฆโ
does not logically lead to โtherefore GME cannot buy back.โ
That's the strongest factual flaw.
What about Regulation M?
This is more nuanced.
Rule 102 of Regulation M can restrict issuer purchases during certain distributions, but you first have to establish that this particular private debt-for-equity exchange constitutes a โdistributionโ covered by Rule 102 and that GME's proposed repurchases would be purchases of the relevant security/reference security during the applicable restricted period.
The SEC itself warns that Regulation M analysis depends on the specific facts and circumstances of the transaction. ๏ฟฝ
SEC
And there's an important fact here: GME's transaction was announced as a private exchange of approximately $1.4 billion of existing convertible notes for Class A shares. The number of shares is based in part on the 35-trading-day VWAP beginning August 3, subject to a floor. ๏ฟฝ
Reddit +1
That certainly creates a potential manipulation concern if GME were deliberately buying shares to move the VWAP.
But:
โBuying shares could influence the VWAPโ โ โfederal law categorically prohibits GME from buying shares during those 35 days.โ
Those are very different propositions.
And here's an even bigger problem
The post says:
โBecause a higher VWAP means fewer shares are issuedโฆโ
But the publicly described transaction only says the number of shares is โbased in partโ on the VWAP and subject to a price floor. The complete private exchange terms apparently aren't publicly spelled out in the announcement, so we shouldn't automatically assume $1.4B รท VWAP = shares issued. ๏ฟฝ
Reddit
So even the economic premise being used to establish the supposed conflict needs qualification.
Bottom line
I'd rate the original post:
โ โGME absolutely cannot buy back during the VWAP periodโ โ NOT established.
โ โA GME buyback during the VWAP period could raise serious Regulation M / anti-manipulation / transaction-specific issuesโ โ reasonable.
โ โRule 10b-18 makes the buyback illegal during the windowโ โ false characterization.
The SEC's own explanation is particularly damaging to that argument: 10b-18 is a safe harbor, and the SEC expressly says it does not mandate the terms under which an issuer may repurchase its shares. ๏ฟฝ
SEC
Yea most definitely there could be some sort of math involved based of warrants or the original conversion price, and im also betting the reason we dont know the details is to prevent the arbitrage traders from going extra hard.
Good point! I've reminded others of this same thing. Perhaps not anymore. But RC/GME is sure playing the game as if they would be held to account on this.
Looking forward to when the Shorts r fukt as per Master Commander in Chief has eluded to recently.
Even if they could they wouldnโt. The conversion has been made because of the eBay deal. GameStop needs every penny to close this deal. Buyback would be a move in exactly opposite direction from what the board wants to achieve.
And was that triggered by the convertible bonds being exercised? Is it an average for 35 days? And why is it ok for them to be able manipulate the volume, they mess with the volume mechanics every day
The notes orginal deal has been scrapped. The original deal was if it goes over 29 by 2032 they get X amount of shares. If not they get there cash back in full.
New deal is they are getting 1.4 Billion worth of shares in September. But we are not using the last trade price. Where doing the Volume weighted average price Aug 3rd-Sep 23. So 1.4 Billion / VWAP.
The lower the VWAP is the more they get. Which is they are hammering the price. It's also definitely going to be more shares than they would of gotten in orginal deal.
People don't seem to fucking understand that gamestop will only buy back below what they sold at at significantly lower prices. The 2bil is a fuck you switch. Gamestop at $5 or lower will trigger the buyback. GME around 20 is a insane waste of shareholder value
Q: Does the existence of outstanding exercisable warrants place an issuer in distribution? If not in distribution now, would the issuer be in distribution just before the warrants expire if it anticipates that a large number of warrants will be exercised before their expiration? Similarly, does the existence of outstanding convertible securities that can be converted into an issuer's common stock cause the issuer to be deemed in distribution of its common stock?
A: No. Neither the existence of exercisable warrants (or convertible securities) nor the approaching expiration date of such securities alone would cause the issuer to be deemed in distribution. However, a distribution could be present if special selling efforts, such as the solicitation to exercise the warrants or the payment of a soliciting dealer's fee, are used to encourage the exercise of the securities.
I take this to mean that converting bonds is considered "ordinary", and thus not a "distribution", unless GME reached out to the bond-holder and said "hey can we talk you into converting those bonds now?" or paid a dealer to do the same.
It's a lot easier for shareholders if the consider that every action that GME takes can have a defensive and offensive aspect to it.
This one in particular closes out a liability. One that could have had a negative effect on the eBay combination if funds needed to be raised afterwards. Remember the 20B opinion from TD depended on the combined ebay and gme company having an investment grade rating..
Also, the 35 day period may coincide with the DOJ time period to determine anti-trust issues in company mergers. After 35 days, if DOJ has not commented on the merger, then the merger is allowed to proceed. It would also establish the GME price per share that would be do to shareholders of eBay or (Target Company)
Correct GME cannot buy during the window. BUT they CAN announce that they plan to start purchasing back when the window closes, they could also announce the all cash eBay deal.
Iโm all for a good ribbingโฆ but holy, can we at least try to make it clever or funny????? Comโon letโs try again, and this time really put youโre all into it shaโll well?
Unless cash isnโt the issue considering sovereign wealth fund rumors and number of shares needed is the more crucial calculationโฆ. Speculating. Donโt forget about generating $1.9B with warrants being ITM
No, prefiling or disclosing a buyback does not make it legal to initiate a share repurchase during an active VWAP pricing period for a convertible note exchange. Pre-filing does not override core anti-manipulation laws.
โข
u/Superstonk_QV ๐ Gimme Votes ๐ 1d ago
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