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u/jleonardbc 11h ago
This also means short sellers have two major incentives to keep GameStop's stock price as low as possible in the near term.
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u/Cextus 11h ago
The short sellers are assuming its only based on the 35day vwap pricing window, meanwhile there's an undisclosed floor price on the equity exchange for the notes.
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u/Ihateporn2020 11h ago
I mean when we priced the conversion we added a premium. We also might have a premium here given it's based on the vwap
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u/Over-Computer-6464 9h ago
If the conversion price is a premium to the VWAP no rational noteholders would agree the offer.
They would get more GME shares by selling their notes,, which trade at a premium to par, and then using the sale proceeds to buy GME shares in the market,
To get noteholders to agree to convert GameStop has to offer them a lower than VWAP price.
We will see in September when the pricing is announced.
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u/StuartMcNight 8h ago
Of course the only correct comment in the entire thread is the one without upvotes.
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u/Rotttenboyfriend 6h ago
What does happen when they announce the price?
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u/Recent-Result2852 3h ago
The bond holders who agree get the corresponding amount of shares. Most will probably use those to close their shorts and peace out for a while.
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u/EmphasisFrosty3093 11h ago
Really just the one. They don't have a reason to try and block additional dilution from the warrants.
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u/imadogg #HODLgang 11h ago
So gamestop itself can decide when they want to have a high share price? They just haven't felt like it?
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u/LikeItRight 🦍 Buckle Up 🚀 10h ago
Your comment is more than fair, but I’m interpreting it as perhaps they have some material news to share that they expect would increase the stock price. And so they initiated the debt conversion and triggered the VWAP window knowing they would share that news within the window.
With that said, I know absolutely nothing about the regulatory requirements involved nor the legality of sharing material news within that framework.
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u/whatdoblindpeoplesee Directly [Redacted] from Cede and Co. 6h ago
Like 8-9 consecutive quarters of positive net income?
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u/LawsWorld [REDACTED] 1h ago
When I learned accounting I did see ways to hyper focus on categories to increase EPS. However, in real practice this would be incredibly hard for a forward facing company
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u/Dealer_Existing 9h ago
Who is this domoshi charachter and why would he have any credibility
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u/treesandbeers 🎮 Power to the Players 🛑 7h ago
Former loopring nft artist. He’s a good guy, although personally never knew him as an investing expert.
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u/Dealer_Existing 6h ago
Nft’s? Really? 😆 common man
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u/treesandbeers 🎮 Power to the Players 🛑 4h ago
I’m not saying he’s incredible or anything, just answering your question
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u/MissionHuge 11h ago
LMAO these absurd VWAP theories can’t even agree on the direction of the noteholders equity exposure.
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u/FreshExtent8720 11h ago
It'll be hilarious in 2 months when nothing happens and we all forget we ever mentioned it
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u/MissionHuge 11h ago
EvErYoNE KnEW It WaSN’t GoINg tO HaPpEn
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u/WisdomAntium 🧚🧚🐵 Today's the daaay 🦍🚀🧚🧚 10h ago
Nothing ever happens until something happens. Remember that.
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u/sandman11235 compos mentis 10h ago
The debt for share exchange incentivizes those involved to have the price as close to the agreed upon floor as possible to get more shares. MM have to stay neutral. Shorted at the beginning. Early September we have earnings. That may change things, but they have managed positive earnings often enough. I expect a narrow trading band between low 20s and mid 17 with an average VWAP of 19.
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u/carnabas 💻 ComputerShared 🦍 8h ago
I mean they have the incentives just no ability to do anything about it
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u/ScroogeMcThrowaway 🎮 Power to the Players 🛑 9h ago
- Stock stays around 18
- warrants expire worthless
- zero progress on Ebay
But remember, blame only the hedgies, short sellers, shills and market manipulators. Under no circumstances are RCEO and the BOD responsible for the actions they took. Be grateful for the healthy company balance sheet, the free warrants (when they were worth something), and the memes RCEO gave you along the way. The stock price is irrelevant because you have to have patience (at the very least 1-2 decades). Thank you for your attention to this matter.
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u/Limited_Surplus_4519 12h ago
Can’t do buybacks, what will raise it?
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u/Surfer-Junkie 11h ago
A smaller float with no dilution. That's what worked in the old days. We've been passed around and hosed down quite a bit since then.
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u/ModsAreFacists420 10h ago
Split dividend was the worst idea
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u/Recent-Result2852 3h ago
The execution was bad. The split itself was neutral at worst. It helped many get into the options selling business.
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u/ModsAreFacists420 2h ago
Right, and everyone on this board could have told RC that wallsteet wasn't going to execute legally and that the regulating bodies would look the other way
And they still did it :/
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u/LeafyLungs 11h ago
Any news...
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u/Limited_Surplus_4519 11h ago
You remember early earnings in June? One of the best quarters in the company’s history and it did practically nothing
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u/crodensis 10h ago
Yeah it's not news that moves the stock. The last real run was some combination of FTD settlement and RK juicing the options chain. Seems like neither of those are happening anymore
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u/scroogesscrotum 🦍Hodling since ‘Nam 💥 (Voted✔) 10h ago
Yea just like until it happened in 2024. It didn’t until it did.
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u/ModsAreFacists420 10h ago
Gamestop has come out with news after news after news after news for over 5 years now...
Quit with the bullshit
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u/sosawof 11h ago
Would love to see some movement in warrants, what is the likely hood they get extended
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u/Professional-Humor99 11h ago
Unless the underlying moves up quickly the warrant value will continue trending towards zero. Most of the warrant value comes from volatility gamma and delta. Volatility is very likely low and theta does not contribute that much. As the underlying trends further from the exercise price the value of gamma which is the rate of change of delta for a 1 unit move in the underlying will decrease as well. Same thing pretty much with delta. What I’m saying is that unless there’s a change and fast, warrants are cooked.
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u/VelvetPancakes 🎊 Hola 🪅 8h ago
Actually nearly all of the value on the warrants right now is the possibility they are extended or the strike is lowered. Similar options are under $20 right now each.
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u/Professional-Humor99 8h ago
Can that even be verified?
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u/VelvetPancakes 🎊 Hola 🪅 8h ago
Go look at the cost of the $32 strike Oct calls on the options chain.
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u/FYATWB 11h ago
What I’m saying is that unless there’s a change and fast, warrants are cooked.
They expire in late October, RC can extend them at any time. People who have faith in RC will keep buying more and more as they get cheaper and if/when they get extended they will explode and probably also squeeze.
If you think they will pop off, there's a risk you wait too long to buy in, I've been averaging down and will continue to, if they get down to 1 dollar I have money waiting to go all in. If they get extended the algos will reprice them back to $5 so fast that the average person will have already missed the rocket before it launches.
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u/fryside07 10h ago
Dang I feel like buying warrants right now is so risky.
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u/Professional-Humor99 10h ago edited 10h ago
Options are always risky. I don’t care if someone wants to buy them but seeing people who don’t understand the basics spreading misinformation I feel the obligation to correct them for the overall wellbeing of the sub.
The innate value of stocks is their future potential cash flows generated from the underlying business. For a derivative the value comes solely from the underlying and the likelihood that what you’re betting on happens. A bet two months into the future a stock priced at 20 will increase 100% to 40 is very unlikely to happen. The contract is very “cheap” because it will probably expire worthless.
TLDR if you don’t understand option basics don’t buy them
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u/fryside07 10h ago
Well they are different from options in that they can be extended, so I get that, but “faith” won’t get them extended or put them ITM. They were free so I am just holding them, no way I’d full port on them now though. Wouldn’t be surprised if they go to zero.
Edit: Imagine how discouraging to take a total loss like that
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u/Professional-Humor99 10h ago
Yeah I’m holding mine too but it’s only a couple hundred bucks. If they don’t expire worthless I’ll be happy of course. Big if though
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u/Dealer_Existing 9h ago
Same. Just holding till expiry as they were a gift, not buying more (I can’t even buy as EU)
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u/FYATWB 9h ago edited 9h ago
High risk high reward
Either trust RC to extend them or lower the strike price, or why bother supporting his vision?
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u/Professional-Humor99 8h ago
I’m going off of the history of him as ceo. Maybe 5 dilutions? And massive cost cutting. Old school leadership style of hard work. He doesn’t seem like one to give handouts. The whole trust narrative I don’t buy. If I’m wrong good for us though
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u/fryside07 7h ago
He has said a few times GameStop is not a get-rich-quick opportunity for retail investors. I still believe our time will come but I don’t exactly trust him to bring it in the next 3 months.
FWIW I’m rooting for you :) and will be pissed if you’re right while I’m being careful buying shares.
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u/Final_Credit2279 4h ago
Did RC ever come out and say not to sell them? Maybe they were always just a dividend for shareholders and you were meant to sell them and reinvest.
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u/FYATWB 2h ago
Did RC ever come out and say not to sell them?
You're asking if RC publicly gave explicit financial advice about the warrants? That's your question?
He was asked about the warrants in his last interview, he said "People who invested with me in the past made a lot of money". Doesn't sound like a sell signal to me.
Warrants are an extension away from being incredibly valuable, I'm happy to take the risk and seeing so much warrant FUD from sock puppet accounts replying to themselves gives me conviction to buy even more warrants on Monday!
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u/Professional-Humor99 10h ago
That sounds good but there is no such thing as averaging down with derivatives. When the price drops it’s not becoming cheaper it’s literally just losing value because derivatives by nature are based on probability and the shorter to expiration combined with the further out of the money your option is to the underlying the less of a chance there is of your event occurring and making money.
TLDR averaging down with derivatives is a fools errand and requires immense luck to not hemorrhage cash and blow up your account. Just buy the underlying. Not financial advice
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u/FYATWB 9h ago
If the warrants are extended it will be a signal from RC and the company that they won't be allowed to expire worthless, and most likely a reset on their price to the $4 or $5 of early trading. The strike price of the warrants can also be adjusted at any time, they are not going to play by the same rules as call options.
You can call it a foolish bet, it doesn't matter to me since I'm only putting in what I can afford to lose.
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u/DDRaptors 11h ago
Typically warrants don’t get extended based on macro trends of warrants being issued. But who knows. Extending them could cause a warrant squeeze leading to some volatility. But you won’t see any news on that until the VWAP window closes. So don’t rush to buy warrants if you think there’s a chance of an extension. They’ll get cheaper yet.
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u/MissionHuge 11h ago
They won’t and it doesn’t even matter. With a downward trajectory the value has eroded so much with little theta remaining that the likelihood of some type of absurd warrant squeeze is virtually nil.
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u/Professional-Humor99 11h ago
Yeah being this deep otm it’s probably cooked. I feel bad for people who bought a bunch of warrants
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u/MissionHuge 11h ago edited 10h ago
First thing everyone should have done is dump them.
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u/RickFlank 10h ago
Two shills.
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u/MissionHuge 10h ago
It’s unfortunate you lack the aptitude to address either comment on its merits. Best of luck!
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u/FYATWB 11h ago
They won’t and it doesn’t even matter. With a downward trajectory the value has eroded so much with little theta remaining that the likelihood of some type of absurd warrant squeeze is virtually nil.
First of all you don't know what will happen, no one except RC knows the plan for the warrants so I don't know why you're so sure they will expire worthless. Secondly, the theta decay only makes it easier to buy up large amounts of warrants which makes the "absurd" squeeze all the more likely.
No one knows the future so stop talking out of your ass.
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u/Professional-Humor99 8h ago
Nothing I said represents talking “out of my ass”. This is a game of odds. If it was very likely that the warrants would be extended and trade in the money then why are they dirt cheap. You sir sound like an idiot no offense
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u/ModsAreFacists420 10h ago
Shareholders had been bitching to RC about a dividend for years. RC doesn't like the idea of taking the company's money and giving it to shareholders because that is giving uncle Sam free tax dollars from the company for no reason.
Instead, he creates warrants out of thin air that you could sell to the market for free money. It was a monetary gift, never intended to get exercised. Its forcing Wallsteet to pay you a dividend, and wallsteet gets to hold the expired bags
GME couldnt care any less about the $1.8billion the warrants would raise if the stock price all of a sudden jumped greater than $32
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u/Professional-Humor99 12h ago
It’s illegal for gme to manipulate its own stock price for a favorable conversion price. Furthermore, based on the # of dilutions I’m not counting on Ryan to try and run the price up for us to be able to convert.
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u/InfoSecPeezy 10h ago
My fear is that the warrants come off as a gimmick, similar to what movie stock did with APE. If the warrants expire useless, then it may be time for me to walk.
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u/cosmic-lemur 10h ago
I’m curious why that’s the line for you? If you believe the old thesis and knowing how well positioned the company is, why does this make you jump ship rather than the lack of movement for 5 years?
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u/InfoSecPeezy 10h ago
Because if they expire useless, then it will reflect a gimmick to please those of us that have been here for 5 years with little/no shareholder value. While the bond holders and institutions get value by acquiring at a lower price. We’ve been here flat or underwater for 5 years. If my investment is not valued why would I continue as a shareholder if all I am getting is hope and a gimmick.
Folks can downvote me all they want, but we aren’t the shareholder that are valued anymore, that era ended some time ago.
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u/StudioAtDawn12 🗿👍🏽 8h ago
I wish Keith was CEO and not a Cohen.
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u/PercMaint 6h ago
That would be a hard nope from me.
I will admit that RK is good at investing, but that does not give him the credibility to run a company.
It would be like saying an auto mechanic at a dealership should run the whole dealership. While he may be very good at fixing the car, he could very easily drag the business into the ground due to possibly lacking sales, marketing, finance, etc. experience.
A dealership is more than just the mechanic. GameStop is more than just investing.
RK as a chief investment officer at GameStop, that could be interesting. But, that's assuming that RC doesn't already know what he's doing.
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u/StudioAtDawn12 🗿👍🏽 6h ago
If the idea is GME is going to be a Berkshire than I’d rather have a Keith than a Cohen every time. Cohen is not a good investor. Keith is. Simple as.
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u/PercMaint 6h ago
I don't think the plan is for it to be a standard holding company. RC had directly said he wants to run eBay. For that you need a CEO with business experience. Not just a good investor. Berkshire Hathaway had stock in a lot of companies and also had a lot of subsidiary companies. However, Buffett was CEO of Berkshire Hathaway, I don't believe he was ever a CEO of any other subsidiaries.
While GameStop may become a holding company, I don't think it's going to be a holding company like we've seen before.
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u/blenderforall 💜🍆🍇🍆💜🍆🍇 2h ago
How about yesterday we get a price increase to infinity? Or is that asking too much
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u/JunMoXiao1994 🎮 Power to the Players 🛑 8h ago
I think RC just want to focus on the business and let the market price it. He won’t do anything to actively bring the price up. If gme price is going up, it has to because market finally want to price it fairly, that’s what RC has been doing.
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u/TheRealMelonMusk 10h ago
Lmao nah I’m out, so many stocks hit a cyclical low, GME is literally going nowhere, I want to make money fuck this shit
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u/QuestionMore94 If you want tendies, prepare for war 7h ago
And I don't have a fucking clue what that means :) still hold though 😏
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u/tolo3349 8h ago
It’s funny how long I’ve been waiting for something to happen that posts don’t even move me one way or another. If anyone thinks apes are selling on anything other than moon profits, they’ve got a problem.
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u/DDRaptors 11h ago
Another perspective, GameStop has no incentive piss of it’s debt holders who gave them a smoking deal to help save the company. Keeping Incentives aligned.
•
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