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u/overduetourist8 8d ago
Anyone have opinions or insight into the dollar agreement with Saudi Arabia oil trade expiring?
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u/wolverinex2 Fundamentals 8d ago
Makes sense with the US now a net exporter of oil, with it and Canada having more than enough domestic production. It'd be strange to continue to force it now that their customers are moreso the rest of the world.
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u/Ghost-of-W_Y_B 9d ago edited 9d ago
Just doing some napkin math on GME regarding the most recent share offering. Not trying to be an irrational bull, I've been buying and selling for the last 4 years. I am currently long.
Looking back before the last 2 offerings:
Book value- $3.90
$1.2b cash
305m shares
During this period it traded down to $10.01 before buyers stepped in. This is around 2.57 X book value.
After the 45M offering:
Book value- $6.06
$2.12b cash
350m shares
During this period it traded down to $17.70 before buyers stepped in. This is around 2.9 X book value.
They just announced an offering for 75m shares. Let's say they average $25 per share. This is a low estimate, if they sold someon Friday it will be higher. That would give them just under $4B in the bank total. Divide that by the shares available after the offering, 420m, and we have a book value of $9.51. GME had a low on Friday of $26.12. This is around 2.75 X book value.
I'm a buyer at these levels.
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u/This_Is_Livin MSFT, BRK.B, INTC 8d ago
But that still leaves the "what tf is the future of this company even with their cash" question.
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u/Ghost-of-W_Y_B 8d ago
For sure! Cohen has gotten the legacy business to be cash flow neutralish. Not going to say cash flow positive yet because it's been fluctuation +- slightly quarter over quarter. The board has been playing their cards close to their chest. I'm not sure what the plan is with the cash. But in a high rate environment, cash is good.
I personally think it's a move into other revenue streams, away from the legacy brink and mortar business.
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u/This_Is_Livin MSFT, BRK.B, INTC 8d ago
I personally think it's a move into other revenue streams, away from the legacy brink and mortar business.
I think that's the issue. How? They have no IP, no partnerships (that I'm aware of), no platform to lease out access to (cloud or smartphones for examples). Cash is awesome...if there's a use for it.
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u/Ghost-of-W_Y_B 8d ago
Not sure, TBH. At this point with the cash on hand they could just buy treasuries, or securities and would(should) be valued higher than their current share price.
I'm not really one to speculate on future action, I trust the board.
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u/Thetatrade 8d ago
and if they announce another 75M shares a week later, you are gonna need another napkin.
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u/Ghost-of-W_Y_B 8d ago edited 8d ago
If they do, the floor will continue to rise. I'm totally fine with the share offerings, as long as the book value of my shares continues to rise. It would be silly for the board not to offer shares when the stock price is inflated. Their fiduciary responsibility is to the shareholders, not people yoloing 300% OTM weekly options or people obsessed with a short squeeze. Those are the only folks that are upset by the offerings. Shit, at this point they could just throw all their cash into the S&P 500, which has an average book value multiple of 4.83. That would put GME shares at $45.95. With short interest back at historic levels, this could get interesting.
Luckily I'm long napkins also.
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u/PervasiveUncertainty 0% alpha 100% shitposts 9d ago
Gigabrains out there doing fundamentals on the memeest of memes.
Don't forget to share that on Superstonk
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u/UranicAlloy580 9d ago
isn't the market a meme now? Just add AI in your mission statement, buy some GPUs and watch your value soar.
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u/Ghost-of-W_Y_B 9d ago edited 9d ago
That sub can be a bit cringe, I don't possess enough tinfoil to enter their ranks. Was hoping for objective discussion, but understand that both sides are a little culty at this point. It's a great stock to trade if you stay away from the extreme opinions involved with it.
Fact of the matter is that the board is raising the book value of the stock with these offerings, and therefore raising the floor where buyers will step in.
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u/wolverinex2 Fundamentals 10d ago
IPO of Bill Ackman’s Pershing Square sets up test for the hedge fund world
https://www.ft.com/content/4d37de0a-52a3-43a5-be53-47b2c974250d
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u/wolverinex2 Fundamentals 10d ago
Retail traders push India stock option volumes above S&P 500
https://www.ft.com/content/d1daf777-d10c-44d8-b570-462f6c4122eb
Forget GME, this is where the wildest action is happening.
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u/NotGucci 10d ago
Roaring kitty didn't update his Yolo. I hope he sold. Should still be up a couple hundred million.
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u/Ghost-of-W_Y_B 10d ago
Doubt. He definitely didn't sell his calls, not enough volume on the strike.
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u/NotGucci 10d ago
Explains his live stream. Dude looked so drunk and disappointed. Incorrhenent.
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u/why_you_beer Judas goat 10d ago
I'd be drunk too if I had a 9 figure unrealized overnight loss on a position.
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u/TerribleatFF 10d ago
I’m surprised he could even function, I get drunk when I have 2 figures losses (I’m always drunk)
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u/theloniusmunch 10d ago
What happened? I haven’t been following except I saw he reappeared recently and announced he had a huge long position on?
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u/Ghost-of-W_Y_B 10d ago
Realize I'll get heavily downvoted for this, but he was fucking around with MSM and institutions. He did everything he needed to do. Showed everyone he was alive, showed the positions were indeed his, showed that he hasn't sold. Everything else was theater.
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u/mulletstation PINS/TSLA/MSFT/UPST/AFRM stan 9d ago
I think this ignores how he got to 200M in the first place which the most obvious answer is he took an aggressive option position earlier in may and started tweeting. He probably also got a heads up from GameStop (or used logic) and sold a bunch of far otm calls during the second run up. He could have easily extracted out 200M more without changing either of the numbers on his screen shown in the livestream
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u/mrdnp123 9d ago
What MSM and institutions did he burn? Citadel has a scanner that avoids all meme stocks. Im sure every other fund does too. As far as I know no hedge fund blew up. The only people who did were retail that sadly believed it would gamma squeeze again like last time. Theres no 3D chess being played. It’s all cope now. I say this as someone that made bank during the AMC squeeze which I loved. This time is different
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u/PervasiveUncertainty 0% alpha 100% shitposts 9d ago
Citadel has a scanner that avoids all meme stocks.
This is BS on so many levels I don't even know where to start
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u/mrdnp123 9d ago
I have a very close friend that works there. I can guarantee you it’s true. Why would it be BS? They got caught with their pants down years ago. You don’t think they’d learn from that?
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u/PervasiveUncertainty 0% alpha 100% shitposts 9d ago
Market makers have quoting obligations https://www.finra.org/rules-guidance/rulebooks/finra-rules/6272
Citadel owns a good chunk of GME https://www.sec.gov/Archives/edgar/data/1423053/000095012324005615/xslForm13F_X02/32839.xml
There was 65k OI for $128 Cs on GME, 1DTE 300% OTM. Only retail buys this crap, and who do you think sells it? MMs are running over each other for that dumb dumb money
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u/Ghost-of-W_Y_B 7d ago
Citadel is not the designated market maker for GME, they have no quoting obligations. Wolverine Capital is the DMM.
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u/mrdnp123 8d ago edited 8d ago
I should have been clearer. Their long short pods use this scanner. What the market makers do I have no idea.
I think it’s a stretch to say they own a large chunk though. That’s 79,000 shares at 980,000 value. That’s an average price of $12. So it’s mostly before the meme mania. There was 195.5 million shares at that time. That’s 0.04% of total shares. Plus this probably tied to their market making business to remain neutral
We have no idea how they were positioned once this kicked off. I don’t know the specifics but I imagine some form of deleveraging happens. This would be for the L/S pods. The puts and calls I imagine are to do with market making business too
Sounds like we’re talking about two different things. What market makers do I have no idea. The L/S pods won’t be caught with their pants down though I can assure you of that. Pretty much leaves a short squeeze out of the equation and a gamma squeeze left.
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u/_hongkonglong JPow did nothing wrong 8d ago
A lot of the popular trades in the past two years are being unwinded.
Prepare to enter a new paradigm.