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GameStop missed out on capitalizing on the Reddit rally

54 pointsby andrewonover 4 years ago

10 comments

alex_dufover 4 years ago
No they didn&#x27;t.<p>It would have been unethical to be the boss of the company that offer new shares, got them bought on a market, but also unblocking all the short sellers in the process.<p>The consequence would be shorters would be happy, the price would drop, the people who bought into the hype would lose, and the gamestop boss would look like the guy who helped the hedge funds and stole from the common people.
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andrewonover 4 years ago
GamsStop seems to be overly cautious. The rally is public information. Everyone knows they were not doing that well with respect to the price.
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thekyleover 4 years ago
Would the SEC have even allowed them to issue shares? Hertz tried to issue new shares when their stock price was irrationally bid up but was blocked by the SEC. Its a little bit different because Hertz was going bankrupt but otherwise the situations are very similar.
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tinyhouseover 4 years ago
They can still capitalize on that. Their stock price is now more stable and is x4 than what it was a couple of months back.
mchusmaover 4 years ago
I think selling stock with proper disclosures to the people who wanted it should have been achievable.<p>This was in fact the biggest bull case I could think of: that by getting maybe $1B on the balance sheet they would be well capitalized to take on projects to revamp themselves.
ectocardiaover 4 years ago
A practical win-win-win outcome might&#x27;ve been for the GameStop board to issue expensive shares to institutional short coverers and then to declare a one-time special dividend-- not quite $300&#x2F;share, but something that&#x27;d appear to serve &quot;the interests of the shareholders&quot;.<p>(Years later, there&#x27;d be scholarly works about how the GameStop Maneuver differs from a Ponzi Scheme.)
RavlaAlvarover 4 years ago
I am ignorant on finance. But if GameStop had considered to offer new shares, wouldn’t some investment bank have to agree to buy them on an exorbitant price, or could they just sell them on open market?
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jugover 4 years ago
Due to regulatory restrictions? That sucks if true. GameStop wasn&#x27;t even part of this other than a target. They didn&#x27;t instigate anything.
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PaulHouleover 4 years ago
In a perfect world they would have bought Valve (to get Steam).
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emteyczover 4 years ago
Why did news report they capitalized on it a week or two ago, then?
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