I’m a gamestop investor and I’m really unhappy with the plan. Gamestop currently has little debt and 8 billion cash on hand. More cash than they have debt, and I have to admit ryan cohen did turn the company around. He did a good job taking Gamestop from a position where they were losing money every quarter to a position where they have profits every quarter.
But this plan is unhinged. It would make the company take on 20 billion debt, and dilute the stock from 448 million to 2.5 billion shares. Currently retail investors own 60% of the company - the only publicly traded company I know of that is majority owned by little people. We would be disenfranchised and retail would only own around 12% to 15% of the company after the dilution and the “big three” Blackrock, Vanguard, and State Street would likely become the majority owners. Because of the dilution our ability to earn ROI would be severely diminished.
In a hypothetical that Gamestop becomes wildly successful and reaches a 100 billion market cap, with the current float of 448 million shares the share price would be 223 dollars per share. If the float were 2.5 billion, then the share price would be 40 dollars per share. 40 dollars per share is lower than a potential entry point for retail investors who bought in back during january 2021. The difference between those two prices is the profit stolen from us, to give it to the big three.
The Gamestop reddits have turned into echo chambers run by delusional sycophants. They ban anyone criticizing the plan. Gamestop can’t issue the 2.5 billion shares without a shareholder vote, and I will definitely be voting against it. I also wrote a letter to the board explaining why this is a bad plan and offering alternatives.
I feel completely, totally betrayed. Cohen posted on X about the “hollow men of the boardroom” not too long ago, about executives whose interests aren’t aligned with investors. Then he rolls out a plan that would throw retail traders under the bus to fuel his own greed.
The fact that so many people seem to support the dilution is revealing at the sheer stupidity of the masses when it comes to economics. I compare it to the bizarre tolerance that people have towards inflation. The fed can’t meet their 2% inflation target anymore and it’s been sky high for years. I hear a little grumbling about grocery store prices but I don’t see any organized movement to address wage stagnation. The minimum wage has been stagnant since 2009. It was long overdue to be raised even before COVID and the hyperinflation hit. When inflation increases and your wages don’t, you are being robbed. It’s the same as if someone held a gun to your head and took money out of your wallet. You lose spending power. But when wages are stagnant and inflation is sky high, the thief is invisible, so people act like NPC’s in an Elder Scrolls game and go on with their lives when they should be getting angry and rebelling against the government.
Same thing here. Dilution is theft from shareholders. It should not be tolerated.
Cohen is trying to meet the requirements and unlock his 30 billion bonus for growing the company by buying a bigger one.
seems like hes trying to pull a musk, but he would need to have funding from other investors to do that.
Congrats to GameStop on being described as “struggling” when I would’ve expected “defunct” by now.
Them going “retro” makes sense to me. I happened to be near one of their locations the other day and remembered that the last time I went in there it was to ask if they still had a bin full of second-hand PS3 discs somewhere. All I got was a succinct “no.”
For fun while walking by, my wife and I went into one last year. There was a small section of games. 80% of the store was those Funko dolls and “nerd” memorabilia to put on a shelf or desk.
Meanwhile our local Game Stop is being turned into a Wing Stop.
The third location in the mall near me closed. The THIRD FUCKING location, now there are still two gamestops in one mall.
Oh no, no, no. How could they even be struggling? They ignore all of their customers and try to rip them off repeatedly. That’s just good business, brick & mortar style. /s
I’ll never forget my brother heading to GameStop to grab me a copy of Halo 3 for like $15. Dude in front of him in line was trading in a steel book edition. Got offered like $4 and thankfully my brother is an extrovert and went “I’ll give ya $20” which is what I’d sent him with.
Are they struggling? Last I checked they had like a full literal billion in cash on hand.
For a company the size of GameStop, I feel that $1B isn’t as much as it sounds like.
