4 ms·
yeah, but how much can they bleed? Can they just give up, default and declare bankruptcy? And then all the people hoping for a short squeeze end up holding stoc
by nico_h 6y ago
yeah, but how much can they bleed? Can they just give up, default and declare bankruptcy? And then all the people hoping for a short squeeze end up holding stock that is not worth much anymore?
- PartiallyTyped 6y agoThey will get margin called, their assets will be liquidated and the stocks covered.
- nico_h 6y agoyeah, but how will the stock be covered, and by whom? If there is no enough stock to buy to cover the outstanding contracts?
- PartiallyTyped 6y agoGME can always issue more shares and that will give them a sizable injection of cash.
- SilasX 6y agoI thought that takes a lot of time though, because of SEC filings, after which the bubble could be over. Or are they allowed to hold on to a bunch of ready-to-go shares? (Honestly asking and don't know, everyone please only answer if you have knowledge of how these kinds of things work and are able to identify and explain away the relevant confusions.)
- PartiallyTyped 6y agoI am not sure either tbh.
- thaumasiotes 6y agoWhat I know is basically just what I read in this article: https://www.bloomberg.com/opinion/articles/2021-01-25/the-game-never-stops https://www.bloomberg.com/opinion/articles/2021-01-25/the-ga... However, it looks very clear that GameStop is allowed to hold on to a bunch of shares it can sell directly in the stock market, since it did exactly that: > Happily, GameStop does have an ATM offering going. It put it in place on Dec. 8, 2020, when the stock was at about $16.35. The way these things work is that GameStop disclosed that its bank could sell stock—up to $100 million worth—“from time to time” at GameStop’s request “consistent with its normal trading and sales practices”; it did not disclose any particular schedule, and has not yet reported if any shares have been sold, or how many, or when. So I don’t know if GameStop had sold the whole $100 million before Friday’s wild run, or if it had any stock left over to sell; if it had any left over, I don’t know if it sold it all on Friday. I hope it did!