The stock offering doesn’t have to be “sold” or completed on Monday. GameStop has 3 years to sell the stock and they can choose whom it goes to. Also, they determine what price they sell the stock for.
It was wrong for me to use the word “stupid”. It was a knee jerk reaction from me because honestly I was of the thought that $20 was far too low. Maybe they needed to act now.
I would still like to know the mechanics behind the sale of the 45 million shares.
It's not about one being wrong or right. Because honestly, what really matters is the "why?".
Not sure any of us know the answer yet.
But I also know, for me, the things that motivate me to learn the most is when i've realized I failed to catch a blind spot.
I don't know the "why" but here's what I will say; what motivates you or I as an investor doesn't and likely won't motivate the decision a ceo makes with regard to the sale of stock.
You or I are solely focused on profit NOW. In other words what was my cost basis and what is my sale price when I decide to strike. And is it the right time to strike (sell) for maximum profits now.
A CEO's decision may be and likely is FUTURE profits or viability. "Will a decision I make today give the best chances for future viability and therefore profit?"
For example: If the CEO is planning an acquisition of some sort and needs the cash in relative short order, do I sell when the iron is hot? Get the most I can now in order to facilitate that acquisition? In other words, are there enough buyers now at this price to effect the sale now. Will 45M shares sell at $20 vs 45M at $50?
Do I have a buyer now at $20 but do not on any price higher than $20?
Do I have a prospective and trusted buyer at $20?
(I personally believe the 45M shares were sold to a single entity or group of people that are trusted. Remember: stock holders have voting rights. Those voting rights vote on future direction of the company. You and I would likely agree that a Black Rock would have much, much different voting motivations than a, let's say a conservative a mega billionaire investor who wants to see the shorts fail. 45M votes has massive weight when that day may come.)
I think that's the thought process flowing for the CEO. Heck he may be wrong when this all shakes out.
Now with regard to sales price: I completely agree with you that as an investor, selling at $20 is dumb. GME will likely rise by a lot and there's a lot of money to be made (or lost for the shorts). And along that same vain, the other end of that deal (45M shares), the buyer IS motivated by cost basis vs future sale price for their profits. So as I mentioned above, a prospective buyer would have to be enticed by a good purchase price in order to secure profits on their risk. So seller (CEO) and buyer (?) would have to be at a place where the deal makes sense for both. I suspect that $20.57 share price was agreeable for both.
Anyway. I appreciate your honest reply but don't be mistaken, there are many of us, including myself, that have no clue how all this is gonna pan out. 😆
The stock offering doesn’t have to be “sold” or completed on Monday. GameStop has 3 years to sell the stock and they can choose whom it goes to. Also, they determine what price they sell the stock for.
It would be stupid to sell it now.
https://finance.yahoo.com/news/gamestop-jumps-raising-nearly-1-204825745.html
An 'ATM Agreement' requires that the stock is sold at the "current market" price when they decide to sell.
So they do not determine the sales price but they do determine at which point in time to sell.
Also. I'm curious. Why would it be "stupid" to sell at current market now?
It was wrong for me to use the word “stupid”. It was a knee jerk reaction from me because honestly I was of the thought that $20 was far too low. Maybe they needed to act now.
I would still like to know the mechanics behind the sale of the 45 million shares.
All in all, you were right and I was wrong.
It's not about one being wrong or right. Because honestly, what really matters is the "why?".
Not sure any of us know the answer yet.
But I also know, for me, the things that motivate me to learn the most is when i've realized I failed to catch a blind spot.
I don't know the "why" but here's what I will say; what motivates you or I as an investor doesn't and likely won't motivate the decision a ceo makes with regard to the sale of stock.
You or I are solely focused on profit NOW. In other words what was my cost basis and what is my sale price when I decide to strike. And is it the right time to strike (sell) for maximum profits now.
A CEO's decision may be and likely is FUTURE profits or viability. "Will a decision I make today give the best chances for future viability and therefore profit?"
For example: If the CEO is planning an acquisition of some sort and needs the cash in relative short order, do I sell when the iron is hot? Get the most I can now in order to facilitate that acquisition? In other words, are there enough buyers now at this price to effect the sale now. Will 45M shares sell at $20 vs 45M at $50?
Do I have a buyer now at $20 but do not on any price higher than $20?
Do I have a prospective and trusted buyer at $20?
(I personally believe the 45M shares were sold to a single entity or group of people that are trusted. Remember: stock holders have voting rights. Those voting rights vote on future direction of the company. You and I would likely agree that a Black Rock would have much, much different voting motivations than a, let's say a conservative a mega billionaire investor who wants to see the shorts fail. 45M votes has massive weight when that day may come.)
I think that's the thought process flowing for the CEO. Heck he may be wrong when this all shakes out.
Now with regard to sales price: I completely agree with you that as an investor, selling at $20 is dumb. GME will likely rise by a lot and there's a lot of money to be made (or lost for the shorts). And along that same vain, the other end of that deal (45M shares), the buyer IS motivated by cost basis vs future sale price for their profits. So as I mentioned above, a prospective buyer would have to be enticed by a good purchase price in order to secure profits on their risk. So seller (CEO) and buyer (?) would have to be at a place where the deal makes sense for both. I suspect that $20.57 share price was agreeable for both.
Anyway. I appreciate your honest reply but don't be mistaken, there are many of us, including myself, that have no clue how all this is gonna pan out. 😆