Gamestop Selling New Shares $GME

Patrick Boyle On Finance

Patrick Boyle

Investing, Business

4.9 • 320 Ratings

🗓️ 6 April 2021

⏱️ 7 minutes

🔗️ Recording | iTunes | RSS

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Summary

Send us a textTwo months after Reddit day traders took GameStonk ( $GME ) shares to surprising heights in a massive short squeeze, the video game retailer is finally trying to cash in. On Monday, it announced plans to issue up to 3.5 million new shares worth $650m via an “at-the-market” offering, or ATM. The structure allows the issuer to raise cash bit by bit over the course of months or years. This is reasonable opportunism. Despite a pullback, GameStop shares are still up 900 per cent this...

Transcript

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0:00.0	Hello and welcome. You are listening to Patrick Boyle on Finance, a podcast exploring ideas from quantitative finance, examining events occurring in markets right now and financial history to see what lessons can be taken away, including interviews with some of the most interesting people in the world of finance. To learn more about the podcast, visit onfinance.org.
0:27.3	Okay, so back in January, I made a video on the short squeeze happening with GameStop. You know,
0:34.2	GameStop, the hottest stock of the pandemic. And since then I've been inundated with Question about GameStop.
0:41.3	Yes, question, not questions. It's one guy.
0:45.3	Hello, Steven. And he asks me about GameStong in the comments of each of my videos.
0:51.3	If you take a look in the comments section of this video right now,
0:55.7	there's a good chance that he's there and make sure you say hi to him. Well, there hasn't been
1:01.0	a ton of news about GameStop since January. They had an earnings report, but who really cares?
1:07.1	The earnings don't actually matter with GameStop. This story is just about Diamond
1:11.7	Hands, and no one really cares if they sold a few video games or not. In fact, if you want
1:17.6	to know how much anyone cares about GameStop and their earnings, just look at the GameStop
1:23.4	congressional hearing that was held back in March. You'll note that they invited the guy from
1:28.4	Melvin Capital, he didn't look like he wanted to be there, the guy from Robin Hood, he had
1:34.1	his hair done for the occasion, and they had Roaring Kitty there who is not an actual cat. But
1:40.5	they didn't bother to invite anyone from the management team at GameStop.
1:45.9	The CEO of GameStop had to watch the hearing about his own company on TV with everyone else.
1:52.9	Well, we finally had some news this morning that GameStop's stock price tumbled on the announcement
1:59.2	that it had filed a prospectus with the SEC, under
2:03.1	which it may offer and sell up to a maximum of 3.5 million shares of its common stock
2:10.2	from time to time through an at-the-money equity offering program. That just means that they
2:16.3	notified the SEC that they may sell that many
2:20.0	shares over time and that they disclosed the risk of buying those shares so that if you
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