From a business fundamentals perspective, it makes great sense to issue new shares. From a PR perspective, it's a nightmare. Reportedly, the amount of shares GME can issue is limited ($100 mil in new shares or something; I forget the specifics). But, the point is analysts believe that, should they issue the new shares, the longs could absorb and the squeeze goes on. But, with the overwhelming narrative that the squeeze is based on the apparent lack said stock available, then releasing new shares could be extremely toxic to GME's image (e.g. betraying their rabid WSB supporters, a corporation helping to bail out the HFs, greedy company who only cares about its bottom lines). Even if it's not true, the optics of the effects of releasing new shares would be, IMO, disastrous (see, RobinHood).cyndiego wrote: ↑Sat Jan 30, 2021 1:24 pm Thank you Tester83 and perfectuncertainty, for your detailed replies! I just learned a LOT.
A couple comments:
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-- What do you guys think about the possibility of GME issuing new stock? Is that likely, and what would the result be?
-- Tester83, if I understand you the hedge funds/shorters options are to take the huge loss, wait (maybe even double down), or possibly play both sides? Is that it? That suggests that if wsb "holds the line", they're right and they will win? Alternatively, if they simply delay and keep the stock price on a plateau, can they simply gradually buy the same few shares over and over again and avoid the pain of the big squeeze?
-- I've been shocked at the lack of transparency for data, like the percent of float shorted. The reported numbers are all over the place. Anyone know the best source or current numbers?
HF's are definitely taking both sides (long, short, long/short hedging). If WSB, HFs going long, and whoever else holding shares keeps up the diamond hands, and the shorts really believe they're not going to sell, in theory they would want out and stop making daily payments. Sure, HFs with shorts could buy shares slowly over time, avoiding the squeeze. But that means they are slowly closing their short position and getting out of their investment.
Research shops, HFs, and other institutions have their own resources to analyze the short position, so that's why the numbers are all over the place. NYSE releases short interest reports roughly every two weeks https://www.nyse.com/market-data/refere ... t-interest. But the time in between then? anyone's guess.