GameStop Shares Drop 14% During Shareholder Meeting transcript

all right everyone so shares of GameStop right now are trading down about 12% after the shareholder meeting in fact they started selling off during the meeting I'm going to share with you my notes and my reactions from the shareholder meeting uh I I think this was a buy the rumor sell the news type of event where there was a lot of speculation coming into this shareholder meeting of what maybe they would say and this and that and then well the reality is not a lot was said and now the prices started to fall so uh we did hit a low of about 2380 we were down about 15% at that time we've come up a little bit off those lows and of course all of this is in response to the excitement that we've had in the past couple of weeks with roaring Kitty taking this massive position which we just got the update on uh was it Thursday or Friday that he now owns 9 m1000 shares the same position that Ryan Cohen owned before he got a seat on the board of directors so you know Kitty's got a position worth $260 million which is a massive position uh but he um as of yet does not have his seat on the board now there was a lot of speculation fueled by these different um memes that uh roaring Kitty has been posting like this one right here showing Michael Scott on his first day of work at the office and people thinking oh my gosh is this going to be you know roaring Kitty's moment to uh join the board of directors well uh let's talk about the shareholder meetings so there were a couple of different things discussed um Ryan Cohen began the meeting with a very brief uh kind of intro it was maybe 2 minutes long it it was like a couple paragraphs spoken definitely it seemed very um pre prepared prepared written and and he was speaking it uh he basically said that you know they're focusing on creating value for shareholders that they're in an they're in a we're in an economy of High interest rates which means the um sort of minimum performance threshold bar is higher in other words when you've got interest rates that are high and you could get 5% investing in bonds or a CD or something like that then why would you even bother taking the risk of investing in an equity right now when the interest rates are like 2% they're super low then people are well they need to get some rewards so they take more Risk by investing in equities but in high rate environments people will sometimes leave the equity markets because it's just not worth taking the risk so he kind of emphasized that the company has to perform he said that they're going to continue it sounded like consolidating down to um just the strongest stores you know continue focusing on cost cutting measures uh in this environment where obviously the businesses based on q1 earnings 29% decrease year-over-year in sales and trying to improve the way the company is running right now so you began by saying the company's going to continue its current business model and we're going to work on improving efficiency okay I mean you know these are all nice things to say but I think for some people that means that you know there's a question of what's going to happen with the $4 billion of cash sitting on the balance sheet right not sure yet so anyways that's just the intro so he intros the meeting with that and then there's some procedural stuff that they that they go through um they had take a vote they talk about the agenda for what's going to be voted on they were voting on um these I think it was five um director seats for the board of directors and these were people that had already been nominated so Ryan Cohen and and then a bunch of other people or five four other people so they did that then they opened the shareholder vote those passed and were approved and then they said they were going to do some Q&A so so the meeting began at 12:36 Eastern Standard Time so six minutes late the Q&A included three questions no answers it was really a lot of Q and not a lot of a so the first question was um questions about the Shelf about the Shelf registration and how they just sold 120 million shares onto the market and there was there was basic basically they said uh we have nothing more to add to this beyond what was already posted um in our regulatory um uh let's see bam in our regulatory filing so this was um let's see Game Stops the regulatory filings here for the registration you know this kind of um basically they said they had nothing to add Beyond this okay right and what was written here so so question one you know what's going to happen with a $3 billion uh that they just raised and then now 4 billion in cash not going to comment on that beyond what was um listed in the registration okay question number two uh there were questions about doing direct registration so shareholders can do this they can take their shares off of their broker and have them directly listed this is almost like um having physical stock certificates and people like this because you're taking your um shares out of the market which means they cannot be lent to other people so other people can short them and now there's other ways to do this in theory with your broker you can say don't lend my shares but some people like to do direct registration so there's a question about that and they said we support shareholders doing direct registration but it wasn't even really much of a question and it wasn't much of an answer and then number three there was questions about the future of the business given that they have all this cash and he said he thought Ryan's um intro answered that well which was like a like I said two-minute long intro that didn't really say anything other than they're going to work on cutting costs and you know just some fluffy stuff like nothing really substantial so the meeting lasted about 16 minutes long um very short meeting basically you like I said Q&A with three Q's no A's and I kind of thought it was you know just the whole thing is is a bit offputting as a retail Trader because I just feel like they really um soaked up our money and turn check you know converted it into cash in their checking account to the2 and three billion dollar uh well now 4 billion and you know and then they share they share no plans really of what they're going to do with that money which is a huge amount of money um there was obviously no mention of of roaring Kitty getting a seat on the board of directors um which isn't surprising because that was a rumor and it was speculative but um you know and I don't know that he would even want it because of the conflicts of interest that could come with his I think kind of role of being very active on um social media with the responsibilities that come with the fiduciary um role as a Sher as a member of the board of directors where you're you know need to repres present the best interest of shareholders so he may not even take that role even if he was offered it but um but at the same time you've got someone who's holding what is at this point 2% of the total float 2% I mean it's kind of crazy and I'll go back to the fact that this is not in my opinion a deep value trade or investment at a a price of $23 because remember this is times four of time times four because of the split so we were up at you know 90 this is $92 a share before the split so buying back $260 Million worth at 9 $92 a share is basically what he's doing he was in with $50,000 at four bucks turned it into 40 million obviously somehow over the last years has managed to turn it into 200 million but now he's got all 200 million back in at the equivalent of $92 a share so seems like a pretty high entry and although he's up right now at one point uh he was up only about $1 a share dollar $140 a share I guess when we hit the low here of 2380 no sorry he was up only 40 cents a share at 2380 so this was a position that at one point his combined positions were 900 million market value uh not that it was liquid and that he could have necessarily sold at those prices but it was worth 900 million and it came uh down to being worth um you know well gosh I guess um his cost basis but that's the value so anyways it's 9 time 23 um so 180 so like 200 million or something like that so it's like 700 million that disappeared in unrealized gains and it's thanks to GameStop and you think about how much money of unrealized gains was lost by retail Traders thanks to GameStop where' that money go GameStop and now now that's money on their balance sheet essentially because they sold shares they sold they sold you shares and that's what I think is really kind of a shame but we'll see what happens to the company over the future at this point roaring Kitty still has $6 million of cash so if he really wants to YOLO he could start putting this on out of the money options um and continue to you know just go deeper into it but you know I mean you're buying on a day when it's down is not a bad strategy in general but my feeling is that retail Traders have gotten burned on this now several times and a lot of Reddit traders who are YOLO and will hold for Life they're already in they're not how many more Reddit Traders are going to be able to add to this to send it back up to $50 a share and remember now to send it back up to $50 a share there's a whole lot more supply to the tune of 25 30% because these shelf registrations so now to get to go back up to those levels would take a level of demand that I just I don't know I don't I don't see it happening but I also want to remind myself that just last week um a week ago Thursday when roaring Kitty scheduled his stream over the course of like 5 hours the stock did go from $30 a share to 68 so it can move very quickly when you know I don't know the sentiment is just right so of course that was before the additional 75 million share offering but anyways this is um you know this is kind of where GameStop is at right now we're coming back down roran Kitt's in a big position he's shown his hands to the market I think retail Traders are getting um discouraged I'm I'm discouraged I know that I'm a Trader not an investor but I think that the company you know being it's hard to be invested in a company that it doesn't feel treats its shareholders you know I it's like would GameStop be here if it wasn't for all the Reddit Traders or would they have been just sent into bankruptcy like other brick and mortar companies I don't know but um you know GameStop was a victim of incredibly high levels of short interest and that backfired on the greedy short Sellers and it created an epic short squeeze but it also became part of kind kind of a political movement um you know of retail Traders opportunity to Stick it to the Man so to speak the the deep pocket hedge funds but now it feels like the institutional Traders once again are the ones who are winning you know and and the company GameStop itself self so we'll just have to see what they're able to do with this 34 billion of cash that they have if they can unveil a compelling business plan around how they're going to use that money to you know take GameStop into the future so 25 years from now 30 years from now this company's still around it's an interesting story uh but unfortunately there were no trade opportunities on this for me today so I got green on other stocks this morning I traded TN trnr which went up this morning about 180% so I traded that I got got profit on that I was happy with that and GameStop uh at this point for me is out of play it's down 10% but I don't think I would trade it personally unless it breaks some pretty key levels on the daily chart um like up around 40 68 80 and then you know higher up a 100 and so I just don't see that happening so I I I don't you know I think it might be we we're we're probably I'm sure we're not hearing the last to GameStop but I think that it's going to be out of play for a while at this point you know the only thing that's going to get it going will be another set of rumors because the news hasn't helped it it hasn't put out news that supported the move it's put out news that's you know thrown sand and water on the on the excitement right it's put out the fire they put out their own fire with the offerings with the earnings which you know they had to release the earnings but they chose to release them early with the offering so it just feels like they they really um Stamped Out the momentum so I don't know that we're going to see it come back anytime soon but anyways that's my update here on GameStop Watch the shareholder meeting wasn't impressed it was very short and I feel like it was you know probably somewhat insulting for a lot of retail traders who have so much invested and are such big fans of GameStop um and they kind of cashed in on all of us so I'm a little disappointed as well but we'll see maybe there'll be other opportunities in the future to get some trades on it and in the meantime I'll stick with trading uh the stocks that I know are volatile each day and where I can find a little bit of profit a little bit of opportunity that's going to be stocks that have high relative volume have breaking news some type of catalyst are generally priced between 2 and 20 are up at least 10% and fortunately we usually find a couple of stocks like that um you know each day so that's what I'm going to be doing and when Gamestop comes back into Focus if there's another moment in time where it makes sense to trade it I'm happy to trade it I've traded a number of times over the past several years but as I mentioned in my episode on Friday uh I've made about $300,000 trading GameStop and that amounts to less than 3% of my gross profit from Trading across the board so GameStop doesn't represent a very significant amount of all my profit because you know there's only been a few times where it really fit within my strategy to actively trade it and I was grateful for those opportunities but um I have a very specific strategy I trade every single day and most days GameStop doesn't fall within it so um I'm going to go back to trading my regular strategy and I'll thank you guys who have been tuning in as always so I hope you hit that thumbs up I hope you subscribe to the channel and if you want to watch me trade I'll be trading of course logging in every day bright and early so I'll be uh back at it first thing tomorrow morning streaming for warrior Pro members okay I'll see you then I'll remind you guys as always that trading is risky my results aren't typical so manage your risk take it slow I'll see you back here tomorrow