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GameStopE1: The Legend of GameStop: History to Date
37 Plays6 months ago
High-level detail of the GameStop saga history to date.
Image Credit: Iuliia Duzhnikova
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Transcript
Introduction and Evolution of 'Magnificent' Podcast
00:00:27
mannycray
Hey me. Hello. Hello. Hello. Welcome to Magnificent podcast. I'm Manny Cray, not my real name. It's my pin name and welcome. This is, this is interesting. So let me explain what's going on here. What's going on here? Well, let me explain.
00:00:47
mannycray
Okay. So the Magnificent podcast was a passion project that I did for fantasy football purposes. Um, you know, DFS, DFS daily fantasy sports purposes. I'd had two full seasons and then I did an episode last year, one, one episode and just kind of fell off. So now I have this orphaned platform. Didn't really know what to do with.
00:01:14
mannycray
I liked the idea of doing podcasts, got kind of sick of doing football, talking about football. So I just thought I'll let it sit out there because you know what? The greatest accomplishment that came from that, I actually got a trademark for Magnificent. So having some sort of ownership over that word is just so fulfilling to me.
00:01:35
mannycray
So here we are, Orphaned Platform. What should this podcast be? Should it be anything? I don't know.
Upcoming Series on GameStop Saga
00:01:42
mannycray
But all I know, I just want to talk about things that are very interesting to me. And right now, there is something very interesting to me. So I'm going to create a season that just kind of follows the GameStop saga. Not sure how many episodes this will be um or what my time is going to look like, my commitment to this.
00:02:03
mannycray
But I just thought it'd be fun. So let's go through it. This first episode, we're just going to do high level history. What's going on in GameStop? What's the history of the big squeeze? What's going on today? Why is this a thing again? I'll try to appeal to all audiences here. So if you have no idea what the hell is going on, I'll try to appeal to that. If you are very deep, well researched, understand everything on that side, I'll try to appeal to that as well. Um,
00:02:34
mannycray
And let's get started. I mean, I apologize. I kind of have a little bit of a cold. I wish my voice always sounded like this. I kind of, kind of got that groovy undertone. I'm groovy. Maybe it's not that groovy. Anyway, Manny Cray. How about that? Let me, let me just give you a quick origin of Manny Cray and what the hell that means.
Manny Cray's Pseudonym and Reddit Connection
00:02:54
mannycray
Cause I think this relates a lot to Reddit. Reddit. right um Shout out to the Reddit communities, by the way.
00:03:03
mannycray
first time actually being involved in Reddit. That has been very fascinating for me, ah stemming from the more recent, ah you know, I guess things that have been happening in the GameStop saga with Keith Gill coming back, which we'll get into. But wow, great community is shout out to GME enthusiast community. Shout out to the GME community. Shout out to the deep fucking value community. Those are the ones I'm active in.
00:03:33
mannycray
Super stock shout out there too. Don't have enough comment to post karma to post learned what that means Have enough to comment Anyway, whoops as I slapped my knees and knocked everything over Okay, so Manny Cray brief origin story About ten years ago more than that like 13 14 years ago. I'm getting older um friends and i decided we should figure out what our spirit crayons are and this is why i know the reddit community as well relate to this you crayon eating crayon sniffing motherfuckers so i feel like i'm kind of an og when it comes to the the crayon all the ties to crayons i have a spirit crayon so do a lot of my friends
00:04:23
mannycray
Uh, we had a, some sort of, um, ritual. We had to do a ritual. We had a big assorted box of crayons. And then in some way, shape or form, everybody's ritual is different. Had to have the crayon choose us. And then that was your spirit crayon.
00:04:40
mannycray
My spirit crayon ended up being manatee. It's a manatee gray. It's kind of a gray with a bluish hue. Beautiful color, beautiful crayon. Uh, so that's my spirit crayon. It's mine. It shows me. And Manny short for manatee cray short for crayon. So there you go. That's the origin. Um, definitely do have a tattoo. Stimming from that as do my friends. Um, shout out to them.
00:05:10
mannycray
So, yeah, here we go. Let's dive into it. Let's let's understand the GameStop saga and see how far this takes us.
History of the GameStop Saga
00:05:18
mannycray
So, OK, let's let's go back, go back in history. And it all starts with Roaring Kitty, Keith Gill, Deep Fucking Value on Reddit, Roaring Kitty on, I guess, Twitter, Twitter X. We'll just call it Twitter X, appeal to everybody there. And um on YouTube, he had live streams. So he comes out.
00:05:39
mannycray
back in, check my notes here, June of 2019, post his first yellow, yellow post on Reddit, revealing his yellow stake in GameStop, which at the time, the share price was at $1.40, pretty crazy.
00:05:55
mannycray
And everybody was shorting it. It had 140% short interest, which is insane. 20% short interest is very high. So 140 is everybody's betting on, or at least with large hedge funds like Citron and ah primarily Melvin Capital.
00:06:13
mannycray
betting on bankruptcy and trying to force bankruptcies. So you have little Keith Gill with his yellow update, um, initial investment of $53,000. And that first yellow post it revealed he, uh, was pretty much up 100%.
00:06:30
mannycray
His whole position was on January 15, uh, 2021 calls exp expiring on that date back in June of 2019. So about an 18 month runway, and he had an $8 strike and it was sitting at a dollar 40 and he was up 50 K pretty crazy up a hundred percent. Goodness. That would be for most people would be like, wow. All right. I'm done. Um, but not for him. And yeah, the rest is, is unfolding here today. So.
00:06:57
mannycray
He had, yeah, just over a hundred K with those gains plus 13 K in cash. Um, but I think as he said many times, it, it's just numbers until you officially sell.
00:07:09
mannycray
So he's getting some interest, keeps posting these videos, these YOLO updates, and people think he's fucking crazy. And then in early 2020, Michael Burry, the billionaire who called it the big short, invested in game, GME, GameStop, and that created quite a stir. That gave a lot of hope. Okay, maybe there's something here, something's going on. He's giving GameStop leadership some advice.
00:07:38
mannycray
trying to turn things around and then he pulls out. That would have been so disheartening. So he pulls out, um, I think he gave it a couple of quarters, pulls out his investment. Guess who enters Ryan Cohen. Shortly after Ryan Cohen, uh, initiates a position in GameStop and his background, he founded Chewy, Chewy.com and sold it for $3.3 billion. dollars have to fact check me on the point three, I think it is 3.3 billion dollars. And, um, yeah, that was back in 2017. He, uh, then started RC ventures where it's just his one man show, his investment firm. I don't think anyone invests, gives him money into invest. I think it's just his own cash. And he just established the LC and something else to fact check me on.
00:08:32
mannycray
Anyway, he was a multi-billionaire, sees the potential opportunity in GameStop, and initiates a position after Michael Burry. Okay. Keith Gill went from, damn it, just lost Burry. But hey, we got Cohen, we got some hope. And from there, the hope kept growing. So in in December 17th, 2020, Ryan Cohen doubled down.
00:08:58
mannycray
ah He had greater than 5% ownership of outstanding shares of GameStop. Unreal had to do a 13G filing as a result. 9,000,000 shares is what was shown in the filing.
00:09:12
mannycray
And so a lot of people are like, what the hell is that number? Why would he choose the 1,000, 9,000, 1,000? So 9,001 IQ, it's kind of a tip of the hat to, uh, uh, legendary video game maneuver, the nine one 9,001 IQ move. Let me explain what this is and clear my throat. Give me a second.
00:09:35
mannycray
hey Sorry about that. Okay. 9001IQ is when in a video game, it looks like you have certain failure, but then you expose a glitch in the video game. You could be, say you're at a dead end, glitch through a wall, and then you go to victory. That's the 9001IQ.
00:09:55
mannycray
Power move nobody sees coming. Tip of the hat to that um as he's investing into GameStop, very appropriate. And what a baller move. Awesome. What a badass. Okay, so now we have a lot of attention.
00:10:11
mannycray
And hedge funds, Melvin capital is going, Oh shit. And it didn't take long from there. It was a month later, um, on January 29th, 2021 game stop hits a peak. If you look at the chart now, it shows $86 and 88 cents, uh, uh, at that historic date. However, intraday hours the day before it topped at 483
Impact of GameStop Squeeze on Hedge Funds
00:10:38
mannycray
bucks, which is insane.
00:10:40
mannycray
So Keith Gill um levels up quite a bit at that point. so And that was cause because of the short interest Melvin Capital needed a $3 billion dollars bailout. Citron lost 100% of their investment and that's what forces the squeeze. um They had large short positions betting down into bankruptcy you know against the the the company. They had to get out and the share price rocketed.
00:11:08
mannycray
So wow, that's a lot. That's a lot. A lot of people lost money. A lot of people made a ton of money. Keith Gill made a ton of money. He ended up, let me just double check. Got his yellow updates. His final yellow update after all the craze was April 16th. So a few months after. And he stepped out with $34 million.
00:11:33
mannycray
dollars Good for you, Keith Gill. Holy shit, that's incredible. Okay, so let's move on. ah Huge squeeze. Then we move into June 2021. Ryan Cohen becomes a chairman at GameStop. What's interesting about June 2021, that's also when DeepFuckingValue, roaring kitty on Twitter, TwitterX, had his last post.
00:11:59
mannycray
ah Notorious for having a ton of beautiful meme video posts with cryptic messages in there. It's fascinating. That's what pulled me in. That's why I'm even interested in it is.
00:12:13
mannycray
Um, and I didn't follow it back then, but I did more recently. So he put his last post June, 2021 Cohen becomes chairman of game stop. So if you follow the history, just looking at the, the share price over time from now until then, there was a lot of swings, a lot of interesting swings, a lot happened. There was still a lot of drama.
00:12:37
mannycray
But then the craze slowly died out and then we found ourselves around $10 per share here in 2024 before Keith Gill returns. um But back up, we'll back up, let's go to 2023, September 28th, 2023. I'm recording this September 27th, 2024. So this is almost one year ago.
00:13:01
mannycray
By tomorrow, it'll be exactly one year ago, Ryan Cohen becomes CEO of GameStop. So he's he's very serious. Went from activist investor to chairman to CEO. What the hell is he got cooking? So a couple months later, a few months later in December of 2023, GameStop implements a new investment policy. And this investment policy is very notable.
00:13:28
mannycray
because it allows ah Ryan Cohen to invest in a wide range of securities, including stocks on GameStop's behalf. He's already a very proven successful activist investor with RC Ventures, and that's kind of what we're gonna get into in some of these later episodes. Just understand how um savvy he is as an investor and what that means if he does leverage that policy going forward.
00:13:55
mannycray
That's what's really intriguing me today. And that's a lot of the reason why I'm, I'm here. I'm researched. I know what the hell's going on to some extent. And I want to talk about it because it's fun to talk about. And I tried to talk to everybody about it in real life and it's just, nobody but really gives a shit. It's surprising how people don't really give a shit like game stuff. They still think of it as brick and mortar dying company. This is ridiculous. It's a, it's a fad. It's a craze. It's going to die.
00:14:24
mannycray
And I'm seeing something different. Excuse me. Clear my throat. Okay. So here we are. New investment policy. And then five months later, May 12th, 2024 deep fucking value returns with a ah tweet on Twitter.
00:14:44
mannycray
And then it's followed by a shit ton more tweets, all of these being very cryptic videos with a ton of riddles and clues. I was kind of late to this, didn't really know what was going on until the live stream. He had a live stream shortly thereafter that got on my radar and I had to watch that live. And I just thought this is all wildly entertaining.
00:15:06
mannycray
and I had the same perspective at GameStop. Dying company, meme craze, great, let everybody else have fun, who cares. Until I started for fun, just watching all the memes, entertainment at first, but then seeing some of these messages, like, I could figure this out, I have to figure this out, I want to look into this.
00:15:27
mannycray
Um, that's what it's there for. So then that sucked me in and then things started lining up for me ever. There's a million theories out there. Ultimately, all it comes down to is game stops in a great position. So I think everyone's going to be, um, right in their own way, but okay. So that was good and all, but when he, when deep fucking value returns, share price explodes a few times.
00:15:52
mannycray
And Cohen um does something incredible where he initiated some offerings into a few of those spikes. So what that does for GameStop is it does increase the share count, but it also increases their cash position. So through two initial offerings, they gain additional about 3.5 billion in cash. They already had about, I don't know, half a million, half a billion plus in cash.
00:16:19
mannycray
So I give him 4.2 billion in cash, significant. That's a transformative amount of cash to create GameStop into something completely else entirely if they wanted to. So that's what I'm curious about.
00:16:33
mannycray
They have the investment policy. They can make other investments. They can make billions turn into billions more. They could transform the company, the business model. It could be something completely else entirely. There's a lot of different avenues. The playbook is wide open. This is a brand new company. Brand new company.
00:16:53
mannycray
Okay. So then there, here's the curve ball. Uh, and June 27th, 2024 deep fucking value through a 13 G it's revealed. So an sec required 13 G is required when somebody owns greater than 5% of the outstanding share count of, uh, of a security. And that's what happened when he bought 9 million, 1,000 Chewy shares.
00:17:22
mannycray
So here we go. Everyone's freaking out. Like what the hell does this mean? Deep fucking value is showing a position in something other than GameStop. What does he have planned? That'll be another episode where we dive into a little bit more of that theory specifically.
Discussion on Deep Fucking Value's Strategy
00:17:37
mannycray
But acknowledging the exact same ah share count as when Ryan Cohen had to file a 13G for GameStop back in December 17th, 2020. So that same 9,001 IQ. But with Chewy, his former company that he sold for billions of dollars. So what the hell is going on?
00:17:57
mannycray
um That made a lot of people confused. A lot of people don't believe his share ownership and think it was voluntary. But um a lot of people are looking at the total outstanding share count of both the class A common stock and the class B common stock and combining those to try to understand the ownership percentage. And this is specifically 6.6% ownership of the class A common stock of Chewy. So required to file this, this is not a voluntary filing.
00:18:28
mannycray
and that's the why there. So fascinating. um So here we are, okay. Nobody knows, did he keep his position in GameStop? Did he have to sell to do this chewy position? And there's a lot of confusion. A lot of confusion out there. What the fuck is going on? So what's interesting and what I think is happening on June 10th, specifically,
00:18:53
mannycray
DeepFuckingValue sent a tweet and it basically is an image that says, you were a billionaire. So that's significant and a lot of people are thinking, okay, he he was a billionaire at one point. So I'm looking at his YOLO updates and looking at the one on June 6th, before his June 10th YOLO update, he was up to $586 $586 million dollars with his GameStop position.
00:19:20
mannycray
So half a billy right there. Okay. So that's archived. And then June 10th, four days later, same position. Um, he didn't sell anything down to $235 million. dollars So he lost like 50% there in just four days, a quarter billion dollars. So on that same day on June 10th, when it said you were a billionaire, it kind of makes you think,
00:19:47
mannycray
he had another position um that equated to half a billion dollars or over many other positions, something outside of GameStop. So if that's true, unless he's playing games with whether it be the algos or hedge funds, who else, you know, whatever.
00:20:06
mannycray
That would lead us to believe on top of this GameStop position on June 6th, that was you know almost $600 million. dollars He had some other ah positions that were around $400 million dollars to get him over a billy. So this makes me think he didn't sell GameStop. He still hasn't had the funds to build up a 9 million, 1,000 share position of Chewy.
00:20:34
mannycray
So fascinating. This guy went from last yellow update. What'd I say? It was 34 million three, you know, three years ago, April, 2021. Today's coming back with what he's showing us is a quarter billion. But then what he's not showing us and the implication is he has at least another, I don't know, we'll just call it like half a billion dollars.
00:21:00
mannycray
So this guy has been doing incredibly well in his investments since GameStop 2021. Holy shit. So what the hell is going to go down? How's this going to shake out? What's his next move? Those are all the questions that are spinning out a multitude of theories and making everyone go insane trying to solve this puzzle, including myself. And it's been very fun. It's been maddening sometimes. um But what a crazy story. So here we are.
00:21:32
mannycray
What is he going to do with Chewie? We don't know. The only clue we have recently was on September 6th. DeepFuckingValue had a tweet showing, uh, from Toy Story where Andy drops Woody and the Woody doll had a dog emoji face. So the implication there was, Oh, he's gonna, he's done with Chewie. He sold Chewie.
00:21:55
mannycray
Now, this is where we need some clarity as far as when you do file a 13G, what is the timeline requirement to reveal that you're less than 5% ownership?
GameStop's New Investment Policy and Future Implications
00:22:06
mannycray
And I've seen a wide variety of answers and haven't gotten quite the clarity I'm looking for.
00:22:12
mannycray
So there's there's annual amendments that are required for when you file a 13G, there's quarterly amendments required, but then the rules get a little tricky to understand outside of that for if um you sell intentionally below and fall below 5%. So maybe he didn't sell, and if he did,
00:22:36
mannycray
We'll have to see it sooner or later. So that's the latest on that side. Now, one final piece of important information before GameStop earnings. um This was, GameStop earnings was September 10th. We'll touch on that really quick.
00:22:55
mannycray
where they revealed, um they actually, they were they were net cash positive for the first time and I'd have to double check, but it, fuck, like four years or something. So as a company, they actually made money for the first time in a long time, which is great. But then they also showed, they showed, you know, 14 billion in cash on on the balance sheet there still. So they didn't do anything with the cash yet in their fiscal Q2.
00:23:24
mannycray
So they could have done something with the cash in their own fiscal Q3. That's something we need to wait for, for their earnings in December. They won't have to really show us what the hell they're doing until they're legally required to. So if they've been doing something, I think their fiscal Q3, yeah, their fiscal Q3 started in August. So August, September, October is their fiscal Q3. It's a month out.
00:23:51
mannycray
August, September, October. So November, December, January is GameStop's fiscal Q4. So if they start investing in doing stuff with their cash, um starting in August, we won't know about it until their earnings for their fiscal Q3, which would be in December. So there you have a little bit of ah um insight there.
00:24:12
mannycray
Another thing, they announced another filing or another offering. So 20 million shares that they ended up executing and selling at 20 bucks per share. So they added another 400 million to their balance sheet. And that's before commission. And that's, um, that's before any other, uh, fees.
GameStop's Financial Moves and Speculations
00:24:29
mannycray
So now they're sending at about $4.5 billion dollars in cash that Ryan Cohen and team get to play around with.
00:24:36
mannycray
So that's where we're at. And that's why this is significantly different this time around, um where we have to sit here and speculate what is Ryan Cohen and team going to do with his cash and transform GameStop and then separately, what the hell is Ryan Kitty going to do with all of his cash? um Last one, August, ah before the earnings, there was an AK filed.
00:25:03
mannycray
which is very significant, and I'm just gonna kind of read this verbatim, um where they issued a notice to terminate um the credit agreement to voluntary so from their credit facility, including all commitments and obligations under their credit agreement. So that's effective as is as of August 27th. 27th. That creates a ton of freedom.
00:25:28
mannycray
um very, very significant. So now their their company's principal sources of liquidity will be cash from operations and cash on hand. Holy shit.
00:25:41
mannycray
Okay. So there you have it. That's, that's the brief history. And here we are today. What the fuck is going to happen? I don't know, but we're going to dive into more of the theories later on. Um, thanks for listening to this first, uh, episode of GameStop. I have a very monotone shitty wrapped closes out with, I didn't really change this or alter this since the fantasy football days, but it's kind of applicable. I'm sorry. You're welcome. And until next time.
00:26:10
mannycray
out.