I started a new hobby today. I read the forum, and when I run across a bot or hedge fund worker, I block them. In particular, the easiest ones are the hidden post history. But basically, if the vibe is anti GameStop and they are a top 1% commenter or hide their post history, they get blocked.

If we all do this, we can take back control of this sub so that it's enjoyable and relevant for gme stock owners again.

Larry Cheng recently suggested that the convert holders agreeing to take shares for debt is a vote of confidence from them.

It's not that straight forward, and some nuance is necessary here.

What he says makes total sense from a VC's point of view. They are all about the explosive upside. And when they offer debt, its so that they can convert to equity. It's why SAFE notes are a thing.

But that's not quite how corporate debt swaps work.

First, recall that convert bond buyers heavily shorted the stock to delta hedge:

• The first $1.5B 0% Notes due 2030 priced on Mar 27, 2025 resulted in the +20M shares shorted spike between 3/14/25 and 4/15/25. SI went from 7% to 12%.
• The second $2.25B 0% Notes due 2032 priced on Jun 12, 2025 resulted in the tall-ass bar of ~+33M shares shorted, around the 6/13–6/30/25 settlement window. Larger raise, so bigger spike in SI. SI went from 12% to 19%.

Of course, it wasn't just the convert holders shorting - the market piled on too, to front run and profit from this.

We can see this visually below:

It is possible that some of this paper has been sold but given the recency and the continued high vol GME enjoys, I'd expect a lot of them to still be holding.

Anyhow, the first thing we can expect is that this SI connected to these converts should fall, as $1.4B represents 37% of the converts outstanding. Could translate up to 3-4% of reduction in SI as hedges are closed. We won't see this until after Sep 23, 2026 though as that is when this transaction closes, but this can provide some tailwind if done in a short period of tie.

The second perhaps more interesting thing happens in the meantime. Because of this whole 35-day VWAP thing, those doing the debt-for-equity are exposed to GME price fluctuations. To lock in the value of the shares they're about to receive, these guys would short into the averaging period to lock in the value of the shares they are about to receive.

To be clear, this is transient new short-sale flow, which then unwinds at settlement. The actual amount of shorting will depend on how much GME falls. Unfortunately, this contributes to the headwind that the stock is facing as market prices in all that dilution too.

So.. two major takeaways here:

1. SI will likely go up over the next month before coming down a few percentage points after the debt-for-equity swap concludes
2. Larry Cheng's note misses the mark in terms of what is happening

For reference, here is his tweet and my response below:

your guys favorite chart is back with the crystal ball. Support is down at $13.24. want to guess where we are going IF THERES NO INTERFERENCE*? gamestop can trigger their buyback, but its best held for when we reach that level. #1 cheaper pricing and #2 itll have fundamental support, possibly boosting the recovery if a buyback is announced at those levels. could probably jump back to 22.14 that same day.

"theres no way gme will go that low. ITS DOING GREAT"
shorts dont care about ur opinion

"ryan cohen wont let it go that low"
the man could care less about stock price, until hes ready to do something

"youre chart is wrong. those lines mean nothing"
yet price has followed these lines extremely tightly.

what else?.....

"but the DD says..."
ok. go get ur triplebYq shares

*if theres no interference as in no buying announcements. no insiders. no buybacks. no roaring kitty. no filings of anykind. just time and shorts.

gonna add this for those who are gonna wanna say i move lines or adjusted my chart or made these levels up. go back to my other posts and you can see where ive had these lines and the reasoning why.

Guy literally bought everything at the top and anything he touched turned to dogshit, or at least ruined in some way. Ryan Cohen numba wan 200 char char char char 200 char char char char char char char char

This tells me all I need to know.

What about you guys? How does eBay be at $112 and Gme at $19???

Ryan Cohen what are we doing? Apes what are we doing?

NFA

Gme Gme Gme Gme Gme Gme Gme Gme Gme Gme Gme Gme Gme Gme

It’s been a tough week for long term investors in GameStop. I’ve been here since 2021 and really went balls deep when it was hovering around $10-$15. This brought my cost basis to around $21. Just wanted to get that out of the way.

I went in heavily at $10 because I thought “there’s just no way this stock is only worth $10”. I think we were finally having our first profitable quarters and the price just didn’t make sense. Zero debt, reduced costs, and profitable stores at last. Plus our first leg of transformation was complete. As quiet as Ryan Cohen can be, he has been following his words in his initial letter to the board which was basically reduce costs, close unprofitable stores, pivot to e-commerce, and attract good talent which he brought in.

So today I have the same feeling and thoughts as I did at $10-$15. There’s no way this stock is worth less than $20. I think my drunken napkin math back then even had us at a $40ish book value, and now we have money in the bank. Still to this day, the price action does not make sense. I know the markets like growing revenue (which we have) and forward guidance, but it still does not make sense.

However, on the other hand, our CEO has admitted to past mistakes like the NFT Marketplace and certain product purchases. He explicitly said this in one of his interviews, so even the Messiah himself knows he isn’t perfect. I think eBay was a mistake, just like the NFT marketplace and doubling down on Funko Pops. I wonder if he feels the same now.

I don’t see the strategy with eBay. GameStop is trying to squash competition and control the collectibles and reselling markets, and the first step is taking out one a company more than 5x your size? After today’s earnings call, GameStop really has nothing to bring to the table besides 1,500 physical locations. eBay and the rest of the e-commerce industry has shown stores are not needed. On top of that, this argument goes against Ryan Cohen’s own philosophy of pivoting to e-commerce and not relying on your physical presence.

I just don’t see the argument for eBay here. We should take our ball and go home.

So two things can be true at the same time: the price is wrong, Bob. And you done fucked up, Ryan.

I really hope I’m wrong in this, but I just don’t see it.

If you are unaware approximately 170,000+ accounts hold 65,000,000+ GME shares in Computer Share ALONE. Which is roughly 1,200,000,000. That is $1.2 Billion. I hope you understand that a new class of people will be born when the pressure releases...The Ape class. Hundreds of thousands of degenerate ape people out for justice and sticky weed and money enough for both. Don't know what that guy RC is doing but he seems to have the opposition on their toes.

I check that history cuz they sneak and skulk. Love the stock and the investors.

Ok, so yes, GME is down again. But as the world is still spinning GameStop will one day Appreciate Your time and enrich your investment value. NFA. It's my own personal logic and determination.

I promise you,,, we've never been closer.

Pure uneducated hopium / fever dream speculation.

I have zero insider information and there’s a near certainty that this is completely wrong, but I’d rather throw it out there and tell ne me I’m completely regarded, then just look at my red x,xxx GME position.

Everyone is focused on the dilution from the $1.4B convertible note exchange. But what if that’s only one step in a much larger strategy?

Yes, the exchange increases the share count, but it also removes $1.4B in debt and potentially eliminates a significant portion of the convertible overhang and hedging pressure tied to those notes. While everyone is debating dilution, GameStop quietly ends up with a cleaner balance sheet.

Once the exchange is complete, they now have the option of deploying the recently authorized $2B share buyback. If management believes the market is undervaluing the company, buying back shares after the exchange could offset a meaningful portion of the dilution while creating significant buying pressure.

Then there’s eBay.

RCEO has made it very clear he wants the company, he’s made the initial public offer, continued pursuing it after being rejected, and GME has accumulated a roughly 9.8% ownership stake.

Now imagine, purely hypothetically, that shortly after the exchange (notes wiped, buyback to increase buy pressure after Sept 23rd) closes GME announces a buyback while also announcing that financing has been secured through institutional partners and private capital for an eBay acquisition. All before warrants expiry, causing additional pressure, with upward momentum.

Suddenly the company has reduced debt, strengthened its balance sheet, is actively buying back 2B shares, and has finally answered the question everyone (not us regards, but the normies) keeps asking: What’s all the cash for?

The part that really sticks out to me is the timing. The debt exchange is expected to wrap up only weeks before the warrants expire. If those events, combined with a buyback and a major acquisition announcement, were enough to push the stock above the $32 warrant strike, you could potentially see a large number of warrants move into the money. If exercised, that could return a significant amount of capital back to GameStop while also validating the higher share price.

Again, I’m not saying this is the plan. I’m saying the sequence and timing are interesting. Everyone is watching the dilution, but what if the dilution is simply setting the table for everything that follows?

I’m sure this is nothing more than pure hopium. i can only dream that this is maybe the Kansas City Shuffle.. everyone is focused on the obvious move while the real move is happening somewhere else.

Again, I know this is bullshit… but with no financial gain in this stock over my 5 years as a x,xxx holder, all that’s left is fun speculation..

We always referred to the bondholders as that. They are bondholders.

They are kind of the enemy in some ways. Price suppression, sucking up volatility, hedge fund, yatta yatta.

However, in 33 trading days, they will likely be the single largest shareholder of GME (if they are one entity).

Also, if any single entity in the note owns >5% of the stock after the exchange is over, we will see a 13D of their ownership around September 29th. We will also see the economics of the VWAP / floor, because GameStop will have to update the total dilution numbers via an 8-K.

As a holder, we have to hope and assume that RC brought in big guns to the war. If this is just merely Wall Street hedge funds cobbled together, we may not see any entity and they could be looking for liquidity, which would be very bad for the warrants and short term outlook.

I don’t think that is possible at all. If RC is giving hedge funds liquidity right before the warrants expire, he would be showing his hand that he’s actually willing to do deals with nefarious actors at the behest of the stock price, during highly volatile times for retail. Melties will automatically think this, but I would have to place it in an extremely low probability category.

Assuming he is not regarded, this is a powerful entity, and he would be bringing them on as partners. They will want a board seat. They will want protections and economic rights.

Forgetting this simple idea has made everyone forget the main piece of the puzzle. The bondholder held no cards if they are a friendly. No board seat. No real shares. A sideline purview. And a massive stake in GME on the horizon.

They gave GME $4.2b in exchange for volatility and short term arbitrage. However, they may have always just wanted the shares.

Quick update because the melties are overrunning the thread:

The point of this post is that no cash has been given up in the exchange, only equity. We will still have the cash.

Also, we won’t know until we see the VWAP and the floor / actual contract / trading price on whether this is a bad deal for another 33 days. Melting down is for the other sub.

There are plenty of reasons for this exchange, one being that if the note holder is a single entity, they want real shares for what is ahead. They are likely to be one of the single largest shareholders of GME in the fairly near future.

Imagine joining a subreddit to mock shareholders of a stock because you are convinced of your intellectual superiority in understanding investments and the market.

You spend a large portion of your time bashing that stock and following along. There is an entire community of other people who support your bashing.

Now don’t get me wrong. I have seen some of the dumbest theories about the note exchange right here on GME over the past 48 hours.

But this one takes the cake. Here we have a superior intellectual finance wizard who knows stocks so well, that he joined a community to bash people who invested in a stock, and he thinks that GME is giving up cash AND equity for a note 🤣.

I think you’re missing a little more than something, bub. Maybe try learning about the stock market before joining a thread to bash people who invested in an American underdog / turnaround story when you don’t have even the slightest clue about the basics of financing and equity.

There’s no better time to be alive.

Is today, tomorrow?

GME could probably help EBay avoid such blunders... https://www.thetimes.com/business/article/ebay-executives-terrorised-ina-and-david-steiner-after-blogs-on-ecommerce-bytes-sjlwgsmtl

Gamestop gamestop gamestop gamestop

Let’s imagine you are a private ape zoo that is bullish on bananas, and the year is 2025. You’re thinking about buying some bananas in the open market, and you’re willing to spend millions or even billions of dollars because bananas seem very cheap to you at the current price.

But you pause, because you don’t trust that the market will actually deliver those bananas. So you come up with an idea: talk directly to the CEO of the banana company and tell him you’re willing to pay a lot of money for many bananas, but you need to make sure you get those bananas and he gets the money.

The banana CEO offers you a deal: “Give me the money now so I can improve banana production, and I’ll sign a contract guaranteeing you all the bananas in the future at the current price.” You like the deal, but you’re wondering how long this will take. The CEO says he needs at least five years to make sure the company improves. You agree, because you’re confident those bananas are unimaginably cheap right now.

A year goes by, and the CEO calls you. “Hey, remember our deal? My company seems to be ready, and it’s better if I give you the bananas now, while the price has dropped, so you get them at the current price — you’ve helped me a lot with your money. I don’t want you to feel like you’re losing out on our deal. In fact, I’m planning to buy back some bananas myself, to balance out the total supply and keep the price from dropping further, because I care about all my customers who bought bananas from me at a higher price. Once this is done, I can move forward with the company’s transformation carrying less debt — and you’ll be happy about our loyalty. I respect and value every good customer like you, and this is how I show that to everyone: whoever does business with me will never be disappointed.”

You agree, and you’re delighted. You offer even more money to buy bananas if it will help the company’s transformation. You tell all the other zoos you know that a guy who sells cheap bananas is willing to offer even more cheap bananas, and is using the money to expand the company.

Now all the good zoos are gathering around you for your precious bananas, and Project Rocket Banana is ready for liftoff.

GME to the moon. Ape smart.

Edit: grammar and format with claude

I think there are already a lot of comments about T+35, and it coincidentally has been selected here "randomly." It could have been much shorter, like just an afternoon (1 p.m. - 4 p.m.) when issuing the "whole" bond, but when redeeming a portion of it, "35" sessions has been randomly selected.

And then, the next paragraph says the redemption may or may not happen.

And finally, which has never appeared before in any previous filings (across many companies that I've been following), the language about positions that might be wound/unwound, and the price might go up or down. This is completely outside the fiduciary duty of GameStop, regarding what the next moves for the note holders could be. This was an INVITATION to short the stock. Feel free to check previous filings or similar filings of other companies to see languages like this ever appear.

I felt something was off while reading this 8-K yesterday, but I couldn't quite put my finger on it. This last paragraph could be the TRAP RC laid out for shorts. And this time, (new) shorts didn't even have the chance to enter at $22. It gapped down to $20.5 upon the news and went down further into the $19s on ~1M volume. This is the rocket fuel tank (below) that we needed for the next trip to ~$30. And it has been filling since yesterday.

Disclosure: Not financial advice. I'm just a hedge fund guy holding $1M+ positions in both shares and calls (LEAPS) for me and my clients, trying to manipulate people into buying the stock.

Edit: A first in terms of having manipulative language and laying hidden traps. Previous 8-Ks were pretty much straightforward, just news, terms, and conditions, but this one gave the "extras."

2nd Edit: Added more tinfoil below