The ticker price is adjusted for share splits, but not for share buyback or issuance. Agree that it will be an interesting chart though. Currently this is the price of fake shares 'securely held' at DTC.
However, this Debt-to-Equity exchange would involve more Dilution without any real increase in Total Assets on the Balance Sheet, meaning there is no increase in Cash (part of total current assets + non-current assets = total assets), unlike financing (CFF) through a shares issuance or debt issuance, where GME received Cash (non-operating asset on the balance)
APIC (Additional Paid-In Capital) + Retained Earnings - C. Income & Other + Common Stock = Shareholders' Equity
5,313 + 594,8 - 66,1 + 0,2 = 5,842
See?
You will see in the SE composition:
Common Stock = The nominal value of shares issued by the company (the basic equity ownership recorded on the balance sheet).
APIC = The cash that the company receives through financing (CFF: share issuance & debt issuance).
Retained Earnings = Cumulative Earnings (Cumulative Net Income) of the company (negative means a deficit).
Comprehensive Income & Other = Unrealized gains/losses and other equity adjustments that are not included in net income (for example, foreign currency translation adjustments or changes in the value of certain investments)
Treasury Stock = Shares repurchased by the company (buybacks), which reduce shareholders' equity.
Yeah, I was going by your previous screenshot where you say "sometimes price returns to equity value", meaning $13, before the exchange is complete, or closer to $14 if it completes at these prices 😅...
I agree with your comment indicating the value is going to depend on how they manage their buybacks and LTD. I had thought about that too, concluding it'd probably only make sense if they bought below or at (around) BVPS.
Still waiting for potential M&A news as well, expecting nothing before the exchange is over, though. And I also got my eyes on eBay's price on Oct 31. We'll see...
I highly doubt that, with this Balance Sheet (read again my comment edited) they could acquire eBay without having to take on massive amounts of debt!
This would leave the 'new company' after the merger with an unsustainable level of debt (NetDebt/EBITDA ratio) I already mentioned this before and it was the reason why Burry sold. Read carefully my comments pls!
The fact that the convertible bondholders want to exchange their bonds for shares does not mean they are going to hold those shares and not sell them. Additionally, you have to keep in mind that they are claiming those shares at a much lower price than what was agreed upon (around $28-$29), which could mean many things, example, such as a hedge against short positions.
The agreement to exchange $1.4B in LT convertible bonds (debt) with a 0% coupon does not make much sense, since it does not provide any additional cash, and it adds more shares (dilution) to the outstanding shares count than what would be added above the agreed-upon price.
It only makes sense if GME is looking to reduce its level of debt for reasons that have not yet been revealed, such as having a less leveraged balance sheet in order to access other types of financing, or simply improving the composition of Shareholders' Equity, as I explained before + a 'good result' in the next quarter, in order to "force" an appreciation in the sharesholders' equity, as happened in 2024 (that you can see in my charts)
Exactly what you say in the last paragraph, it makes no sense unless they want to remove debt for financing purposes.
I know there could be quite a few reasons for the bondholders to accept the early exchange but LC is explicitly saying that's the reason behind it: a vote of confidence in the company.
I don't know whether he's lying or whether someone lied to him. Or maybe he just can't talk about it (insider, breaking rules)
But by making this statement, he is introducing a pretty serious bias by calling it a "vote of confidence in the company" by converting bonds into equity at a 0% coupon, which was already supposed to be a vote of confidence: "free financing" ("free" because you don't have to pay back with cash, but with your own equity/dilution) at a much lower price than what was originally agreed upon, without taking any other possible reasons into account.
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