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The most fascinating thing, to me, about all of this is the potential for large groups of retail investors to invest in a company not because it's doing well, o

The most fascinating thing, to me, about all of this is the potential for large groups of retail investors to invest in a company not because it's doing well, or they think it's undervalued, but because they want it to do well-- investing with the specific intent to give it the resources needed to do well. Perhaps unintended, this seems to be the net result with AMC. A few days ago they probably wondered how to keep the lights on. Now they've sold some stock at a premium and have a lot more cash on hand to trudge along as (hopefully) vaccines mostly resolve their issues. I can imagine the emergence of a different sort of activist investor: large groups that find distressed companies they really want to do well, and instead of the company getting eaten by a private equity shark, they're given the resources for a turn around. (Some-- many? -- would fail anyway) I recognize this probably unrealistically optimistic, but I imagine some Occupy Wall Street veterans are having a big laugh right now either way.

totalZero 6y ago
I mean, that's a pretty legitimate reason to invest, no? Softbank bought Sprint with the intent to give it the resources needed to do well. They pumped money into the company to cover debt service until eventually it merged with T-Mobile. AMC got out of $600mm of debt as a result of its share price appreciation in all this madness. https://www.marketwatch.com/story/amc-entertainment-to-issue-444-million-shares-as-investors-opt-to-convert-600-million-of-convertible-debt-2021-01-28 https://www.marketwatch.com/story/amc-entertainment-to-issue... Share price is not arbitrary. It has ramifications for a company's credit, debt load, and ability to make acquisitions.
- ineedasername 6y ago
  Sure: I guess what I find novel is that rather than a Softbank, a self-organizing process of retail investors would drive the process. For AMC debt: wow, that's pretty insane. Lots more cash, much less debt. They should encourage employees to become premium reddit members as a thank-you
MattGaiser 6y ago
> investing with the specific intent to give it the resources needed to do well Buying shares only sends money to the company if they issue new ones. I am not aware of Gamestop doing that.

totalZero 6y ago

I mean, that's a pretty legitimate reason to invest, no? Softbank bought Sprint with the intent to give it the resources needed to do well. They pumped money into the company to cover debt service until eventually it merged with T-Mobile. AMC got out of $600mm of debt as a result of its share price appreciation in all this madness. https://www.marketwatch.com/story/amc-entertainment-to-issue-444-million-shares-as-investors-opt-to-convert-600-million-of-convertible-debt-2021-01-28 https://www.marketwatch.com/story/amc-entertainment-to-issue... Share price is not arbitrary. It has ramifications for a company's credit, debt load, and ability to make acquisitions.

ineedasername 6y ago
Sure: I guess what I find novel is that rather than a Softbank, a self-organizing process of retail investors would drive the process. For AMC debt: wow, that's pretty insane. Lots more cash, much less debt. They should encourage employees to become premium reddit members as a thank-you

MattGaiser 6y ago

> investing with the specific intent to give it the resources needed to do well Buying shares only sends money to the company if they issue new ones. I am not aware of Gamestop doing that.