GameStop Just Pulled The Biggest Reverse Uno Card On Market Manipulators Ever

It is no secret that Gamestop Corp GME has been one of the most heavily manipulated stocks in history. Rehypothecated shorting of their company over 100% of the float, multiple brokers shutting off the buy button on the stock so that only sales could be placed, and also billion dollar company CEOs lying under oath to congress.

It is our personal opinion that under the guidance of Ryan Cohen, the company has figured out a way to fight the constant manipulation of their company.

From the Q4 Form 10-K “As of February 3, 2024, we have $101.3 million remaining under the repurchase authorization.” This means that at a share price of $15.00, GameStop could buy back 6.75 million shares of their stock and retire those shares to decrease the float. This is the first avenue that GameStop has.

Also in the Q4 Form 10-K “On December 5, 2023, the Board of Directors approved a new investment policy. The Board has delegated authority to manage the Company’s portfolio of securities investments to an Investment Committee consisting of the Company’s Chairman of the Board of Directors and Chief Executive Officer, Ryan Cohen, and two independent members of the Board of Directors. 

The Investment Committee will direct the investment activity of the Company in public and private markets. Mr. Cohen or other members of the Investment Committee, each in their personal capacity or through affiliated investment vehicles, may at times invest in the same securities in which the Company invests. The Board anticipates that such investments will align the interests of the Company with the interests of related parties because it places the personal resources of such directors at risk in substantially the same manner as resources of the Company in connection with investment decisions made by the Investment Committee on behalf of the Company.”

To summarize the above paraphrase from the Q4 Form 10-K, Gamestop has the ability to invest their BILLION dollars in cash into public and marketable securities in which Cohen or other members ALSO invest in. Cohen’s largest position personally is Gamestop shares and this filing allows Gamestop to buy its OWN shares without having to retire those shares like a stock buy-back. This is a genius way for a company to buy its own stock during heavily shorted downward prices or during the stock’s price cycles who have seen fast 100% gains and 50% drops.  This also secures the members of the investor committee to also purchase more shares of GameStop.. This is avenue 2.

Lastly, from the Form 424B5 filed on May 17, 2024, “We have entered into an Open Market Sale AgreementSM, or Sales Agreement, with Jefferies LLC, or Jefferies, on May 17, 2024, relating to shares of our Class A common stock, par value $0.001 per share, or common stock. In accordance with the terms of the Sales Agreement, we may offer and sell shares of our common stock from time to time through Jefferies, acting as our sales agent and referred to as the “Sales Agent.” Under this prospectus supplement and the accompanying prospectus, and in accordance with the terms of the Sales Agreement, we may offer and sell up to 45,000,000 shares of our common stock from and after the date hereof.”

Avenue 3:  GameStop set into place the ability to sell shares of their stock on their massive upward price swings to secure substantially more cash on their balance sheet and lead the company to an even more profitable company.  This is where the Reverse Uno card comes in.  GameStop can now hypothetically sell 45 million shares when their stock price jumps to $50 again which would secure $2.25 billion in cash that can THEN be used to either buy back $100 million in their shares or be used to purchase then $3.25 billion dollars of marketable securities.  That much cash would be worth more than the entire market cap of the company at the end of April during their lows.  

GameStop and its investing committee now has the ability to buy back $100 million of shares, purchase over $1 billion in shares to hold on their balance sheet and sell for a higher price on massive price swings, and also sell 45 million shares during extremely large price increases as well.  They can now effectively battle the market makers in every direction of their price swings. Buckle Up.

Malone Wealth Ventures LLC is a Registered Investment Adviser. Advisory services are only offered to clients or prospective clients where Malone Wealth Ventures LLC and its representatives are properly licensed or exempt from licensure. This website is solely for informational purposes. Past performance is no guarantee of future returns. Investing involves risk and possible loss of principal capital. No advice may be rendered by Malone Wealth Ventures LLC unless a client service agreement is in place.

This article is from an unpaid external contributor. It does not represent Benzinga's reporting and has not been edited for content or accuracy.

Market News and Data brought to you by Benzinga APIs
Posted In: OpinionMarketsGeneralcontributorsExpert Ideas
Benzinga simplifies the market for smarter investing

Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.

Join Now: Free!