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They absolutely missed out on an opportunity. You can argues it would have been unethical for them to take advantage of it. But there was an opportunity to rais

They absolutely missed out on an opportunity. You can argues it would have been unethical for them to take advantage of it. But there was an opportunity to raise a substantial amount of money, which would help the company. Unlike AMC and AA they couldn’t easily take advantage of it due to disclosure requirements.

NoOneNew 6y ago
As much as I am on the WSB side of this fiasco, I still agree it was mature and smart for Gamestop not to make an opinion or jump on this in any form. It would have been a legality mine field for them to cross and properly capitalize on. Public companies are under a lot more scrutiny than private ones. Dont assume inaction was just because they're stupid. Theres zero wrong with picking and choosing battles that you know you can win. They probably saw this as so drastically out of their control, it would be too difficult not to get swept up in the turmoil. But I do believe they made some good on the momentum, just not publicly. Probably got some more exec's from other companies willing to come aboard that they're still negotiating with.
- JumpCrisscross 6y ago
  > it was mature and smart for Gamestop not to make an opinion or jump on this in any form GameStop couldn’t. They were deep into the quarter and had non public financial information. The companies that could sell stock did. If GameStock could have sold stock and didn’t, and if I were a shareholder, I’d sue. They have an obligation to current stockholders. And a duty to be honest to new ones. Nobody bought their shares at inflated prices under duress.
  - andrewon 6y ago
    They already had shares that scheduled to sell but decided not to execute. It seems like the advice I always got from my company's legal department when I asked if it was ok to something: don't do it.
  - spoonjim 6y ago
    Your lawsuit would be thrown out, there is no obligation in US law to issue stock in this scenario. "Fiduciary duty" has been quite well-defined by courts and this isn't even in the same galaxy.
    - JumpCrisscross 6y ago
      > Your lawsuit would be thrown out It would be a disclosure lawsuit. Lesser claims have been settled. The bar for throwing out cases is pretty low.
__michaelg 6y ago
It may have been outright illegal though. You're taking money from your future shareholders. This may very easily be seen as securities fraud, because you're basically selling shares in your company despite knowing that it's massively overvalued.
- jacksonkmarley 6y ago
  It seems like the SEC thinks it's (potentially) ok as long as you release all the pertinent information. https://www.sec.gov/corpfin/sample-letter-securities-offerings-during-extreme-price-volatility https://www.sec.gov/corpfin/sample-letter-securities-offerin...
- chii 6y ago
  Exactly the reason why Hertz did not proceed to do the same when their price irrationally rose during the pandemic. They wanted to do it, but the SEC sent them a letter asking for clarification, and that was enough for Hertz to get the message.
  - CPLX 6y ago
    It's not exactly the same. Hertz was actually in bankruptcy, making all equity shares essentially worthless by definition. That's much more problematic than the scenario described here.
    - o-__-o 6y ago
      AMC is a better example, they offered new shares while the price was 3 or 4x of their lows
  - kgermino 6y ago
    Not exactly, it's way more interesting than that (to me anyway)... Hertz actually did sell new shares into the price spike. They went to the bankruptcy judge and got permission to sell new shares to help pay off the creditors. Shortly after they started selling the SEC essentially said "lol no" and told them to stop.
- 6y ago

NoOneNew 6y ago

As much as I am on the WSB side of this fiasco, I still agree it was mature and smart for Gamestop not to make an opinion or jump on this in any form. It would have been a legality mine field for them to cross and properly capitalize on. Public companies are under a lot more scrutiny than private ones. Dont assume inaction was just because they're stupid. Theres zero wrong with picking and choosing battles that you know you can win. They probably saw this as so drastically out of their control, it would be too difficult not to get swept up in the turmoil. But I do believe they made some good on the momentum, just not publicly. Probably got some more exec's from other companies willing to come aboard that they're still negotiating with.

JumpCrisscross 6y ago
> it was mature and smart for Gamestop not to make an opinion or jump on this in any form GameStop couldn’t. They were deep into the quarter and had non public financial information. The companies that could sell stock did. If GameStock could have sold stock and didn’t, and if I were a shareholder, I’d sue. They have an obligation to current stockholders. And a duty to be honest to new ones. Nobody bought their shares at inflated prices under duress.
- andrewon 6y ago
  They already had shares that scheduled to sell but decided not to execute. It seems like the advice I always got from my company's legal department when I asked if it was ok to something: don't do it.
- spoonjim 6y ago
  Your lawsuit would be thrown out, there is no obligation in US law to issue stock in this scenario. "Fiduciary duty" has been quite well-defined by courts and this isn't even in the same galaxy.
  - JumpCrisscross 6y ago
    > Your lawsuit would be thrown out It would be a disclosure lawsuit. Lesser claims have been settled. The bar for throwing out cases is pretty low.

__michaelg 6y ago

It may have been outright illegal though. You're taking money from your future shareholders. This may very easily be seen as securities fraud, because you're basically selling shares in your company despite knowing that it's massively overvalued.

jacksonkmarley 6y ago
It seems like the SEC thinks it's (potentially) ok as long as you release all the pertinent information. https://www.sec.gov/corpfin/sample-letter-securities-offerings-during-extreme-price-volatility https://www.sec.gov/corpfin/sample-letter-securities-offerin...
chii 6y ago
Exactly the reason why Hertz did not proceed to do the same when their price irrationally rose during the pandemic. They wanted to do it, but the SEC sent them a letter asking for clarification, and that was enough for Hertz to get the message.
- CPLX 6y ago
  It's not exactly the same. Hertz was actually in bankruptcy, making all equity shares essentially worthless by definition. That's much more problematic than the scenario described here.
  - o-__-o 6y ago
    AMC is a better example, they offered new shares while the price was 3 or 4x of their lows
- kgermino 6y ago
  Not exactly, it's way more interesting than that (to me anyway)... Hertz actually did sell new shares into the price spike. They went to the bankruptcy judge and got permission to sell new shares to help pay off the creditors. Shortly after they started selling the SEC essentially said "lol no" and told them to stop.
6y ago