Thursday, April 3, 2025

CloudBet: The Premier Crypto Betting Hub for High Rollers

Since 2013, CloudBet has carved a reputation as the original crypto sportsbook and casino, attracting seasoned bettors and crypto enthusiasts from around the globe. With its unwavering commitment to high limit betting, instant cash rewards, and a robust VIP program, CloudBet has earned its title as the ultimate destination for high rollers who want to bet big and win bigger.

CloudBet’s high stakes platform sets itself apart with no limit betting, allowing users to place massive wagers on top tier sports events, from the English Premier League to UFC title fights. Its powerful crypto integration ensures seamless, anonymous transactions using Bitcoin, Ethereum, and several other leading cryptocurrencies. Payouts are lightning fast and always in cash, no bonus restrictions, no hidden conditions.

IPL Odds Like No Other

For cricket fans, particularly those following the Indian Premier League (IPL), CloudBet offers some of the highest odds in the industry. This gives punters the best value for their wagers, with every match providing an opportunity for outsized returns. The high limit sportsbook supports live cash outs, letting bettors lock in profits or cut losses with strategic timing.

Cutting Edge Esports Betting

CloudBet also shines in the esports arena. Its intuitive interface and real time streaming capabilities make it easy to follow and bet on popular titles like CS:GO, Dota 2, League of Legends, and Rainbow Six. Every league qualifier and final is streamed live, putting you right in the action with just a few clicks. For esports fans, it’s a complete, immersive experience.

Exclusive Combat Sports Coverage

As the official sportsbook partner of Karate Combat and Professional Fighters League (PFL), CloudBet offers exclusive access to live fight streams and betting odds. Bettors can watch every round live and place bets in real time, turning combat sports nights into thrilling, interactive experiences.

VIP Treatment for Elite Bettors

CloudBet’s VIP program is tailored for serious bettors. It offers enhanced rewards, personalized support, seamless status transfers from competing platforms, and invites to exclusive events. High rollers are treated to a premium experience from the moment they join.

Whether you're into mainstream sports, esports, or live combat action, CloudBet delivers a secure, high stakes betting environment powered by crypto. With unmatched odds, a sleek platform, and generous perks for VIPs, CloudBet is more than a sportsbook, it’s a destination. Sign up today and elevate your game.

Visit: Cloudbet.com


Genius Group Blocked from Raising Funds and Buying Bitcoin by New York Court

https://www.reddit.com/gallery/1jqwpwb

What happened?

https://i.redd.it/17pmob2gxose1.jpeg

9/11 won

https://i.redd.it/sq4tux2jhose1.jpeg

Wednesday, April 2, 2025

Master List of 4/20 "Catalysts"

This is at attempt to document EVERYTHING we've seen as a potential catalyst or tinfoil occurring on or around April 20th, including references to the date itself, or even to the 420 meme, etc. If there is anything missing, please mention it in the comments, and I will add it in.

💥 Mid-Late April Catalysts

Latest CAT error C+35 "Reckoning" (from Regional-Formal, aka Blue Box Guy)

Richard Newton's Model Predicts Upward Pressure in April through OPEX

April 17 Monthly OPEX

  • Maybe nothing special, but it is the OPEX before 4/20 (which will be over the weekend)
  • Since RK has liked posting on Sunday nights before things kick off, this would give him the opportunity to post exactly on 4/20 while markets are still closed (maybe at 8pm?)

Next BOJ Rate Hike

  • Japan's next monetary policy meeting is April 30-May 1
  • Another rate hike could add stress to the carry trade unwind, and add ripple effects.

Nintendo Switch 2 Pre-orders

1 year since the last Bitcoin Halving

  • With each Bitcoin halving event that occurs every 4 years, the price tends to rise dramatically.
  • The last halving was actually on 4/20/24, and though the price has increased somewhat, it's not yet the dramatic rise everyone expects.
  • Compare with previous halvings here: https://charts.bitbo.io/halving-progress/

(Possible) News of GameStop Purchasing Bitcoin

  • Not a guarantee, but they have completed the offering and have a lot of dry powder.
  • They have the opportunity to time a news release strategically on or before 4/20.

(Possible) GameStop Insider Buying

  • With earnings done, and the convertible bonds offering completed, RC and other insiders might just be waiting for the news of having bought Bitcoin to be released, allowing them a window to buy more shares themselves (assuming there is no other material non-public information, such as info of an M&A, etc.)

🍻 Memes

RK "What's in the box?" meme with frame timestamp 4:20

RK "TIME" cover meme with time 1:09/4:20

All of Avocado's "Happy Cat Day!" posts

  • Each post by Mr. In-My-Anus, for three years was submitted on October 29, at exactly 4:20pm.

Ryan Cohen's "It's 420 everyday in corporate America" post


Tuesday, April 1, 2025

[News and Sentiment in a Nutshell] April 1, 2025 - Trump Tariffs Loom, Tech Shines, and Gold Hits New Peaks

Hey everyone, it’s April 1, 2025, and I’ve put together a sentiment analysis based on today’s news (last 24 hours) and the past 30 days of market data. As a senior analyst, I’ve sifted through headlines across multiple sectors and markets to give you a snapshot of where things stand. The current time is 5:02 PDT, and with Trump’s tariff announcement expected tomorrow, there’s a lot to unpack. Let’s dive in.

Key Events Driving Sentiment Today

  1. Trump Tariffs Nearing Deadline
    • Headlines like “Trump to announce new trade tariffs at 3 PM on April 2 - Treasury Sec. Bessent” and “USTR considers lower tariffs for some countries, WSJ reports” signal that the market is bracing for impact. Uncertainty is high, with “Peak tariff uncertainty: Are we there yet?” capturing the mood. Sentiment here is cautious but mixed, as some expect a softer approach than the feared 20%+ tariffs.
    • International responses include “EU readies response to potential US tariffs” and “Canada to respond deliberately to potential U.S. tariff plan,” suggesting global markets are on edge but preparing countermeasures.
  2. Tech Sector Buzz: IPOs and Acquisitions
    • “Circle Internet Group files for IPO, plans to list on NYSE” and “CoreWeave stock surges past IPO price after lackluster start; closes up 42%” highlight tech’s resilience. Meanwhile, “Visa bids $100 million to snag Apple card from Mastercard” and “Roblox stock rises following new ad format and Google partnership” show innovation driving gains. Sentiment in tech is strongly positive despite broader market jitters.
  3. Crypto Rebound Amid Tariff Fears
    • “Bitcoin price today: rebounds to $85k after bruising Q1 losses; Trump tariffs loom” reflects a recovery in crypto. With BTC-USD closing at $84,964.98 today (up from $82,571.01 yesterday), sentiment is cautiously optimistic, buoyed by “Hut 8 stock sees strong gains post Trump-backed American Bitcoin venture.”
  4. Gold Soars to Record Highs
    • “Gold prices rally to new peak amid fears of upcoming Trump tariffs” and GC=F closing at $3,151.10 (down slightly from $3,156.30 yesterday but still near all-time highs) point to gold as a safe-haven winner. Sentiment is overwhelmingly positive as investors hedge against uncertainty.
  5. Oil Steady, Geopolitical Tensions Simmer
    • “Oil futures little changed despite API reporting jump in crude stockpiles” and “Oil prices steady near highs; geopolitical tensions outweigh economic worries” suggest stability. Sentiment is neutral, with supply concerns balancing tariff-related demand fears.

U.S. Sector Sentiment Breakdown

  • Technology: Positive Tech is a bright spot with IPOs (Circle, CoreWeave) and strategic moves (Visa, Roblox) driving optimism. The S&P 500 (^GSPC) rose to 5,633.07 (+0.38%), and Nasdaq (^IXIC) jumped to 17,449.89 (+1.34%), reflecting strength in tech-heavy indices.
  • Real Estate: Neutral Limited direct news, but “UK house prices unexpectedly stall in March as stamp duty tax break ends” hints at broader housing sensitivity to policy shifts. U.S. real estate sentiment remains steady, with no major catalysts today.
  • Gold: Strongly Positive Gold’s rally to new highs amid tariff fears underscores its safe-haven appeal. GC=F data shows a 30-day upward trend, reinforcing bullish sentiment.
  • Oil: Neutral Oil prices are holding firm despite mixed signals (API stockpile jump vs. geopolitical risks). No drastic moves in sentiment today.
  • Healthcare: Mixed “Hims & Hers Health stock gains on Eli Lilly partnership” is a positive, but “Axsome shares fall after trial results disappoint” and “J&J stock drops after failed attempt to end talc claims” temper enthusiasm. Sentiment is balanced.
  • Raw Materials: Neutral “Cocoa futures see largest gain in over a week amid harvest concerns” suggests some commodity strength, but broader raw materials lack significant movers today.
  • Utilities: Neutral No major U.S. utilities news, though “Southern Water secures funds to extend liquidity through June next year” (UK) indicates sector stability. Sentiment is unchanged.
  • Unemployment Data: Slightly Negative “US JOLTs Job Openings dip below forecast, indicating a slight cool in labor market” suggests softening demand, aligning with “US job openings broadly steady as concerns swirl around Trump tariff plans.” Sentiment reflects mild concern.
  • Mortgage Rates/US Federal Interest Rate: Mixed “Fed’s Goolsbee warns of inflation, economic risks from Trump tariffs” hints at rate pressure, but ^TNX (10-year Treasury yield) eased to 4.156% from 4.246%. Sentiment is cautious as markets await Fed signals.

Major U.S. Market Performance

  • Dow Jones (^DJI): 41,989.96 (+0.02%) – Flat, reflecting tariff uncertainty.
  • S&P 500 (^GSPC): 5,633.07 (+0.38%) – Tech-driven gains.
  • Nasdaq (^IXIC): 17,449.89 (+1.34%) – Strong tech rally.
  • Russell 2000 (^RUT): 2,009.42 (-0.35%) – Small caps lag amid tariff worries.

Significant International News & Sentiment

  • Europe: Mixed “Euro zone inflation cools, boosting expectations for ECB rate cut” is positive, but “Italian manufacturing sees further contraction in March” and “Spanish manufacturing activity contracts for second month” drag sentiment down. EURUSD=X slipped to 1.0793 (-0.26%).
  • Asia: Neutral “China factory activity beats forecasts, hits 4-mth high in March – Caixin PMI” boosts optimism, but “Xiaomi stock sinks after fatal crash involving its EV” and Japan’s Nikkei (^N225) dropping to 35,624.48 (-0.52%) balance it out.
  • Canada: Slightly Negative “Canadian dollar hits two-and-a-half-week low as U.S. tariffs loom” and “Canadian factory PMI hits 15-month low on expanding trade war” reflect tariff-related pressure.
  • South Korea: Neutral “South Korea March inflation +2.1% y/y, slightly above forecast” suggests resilience, but “South Korea exports rise but tariff risks dim outlook” keeps sentiment in check.

Final Thoughts

Today’s market sentiment is a mixed bag, with tech and gold shining amid tariff uncertainty. The S&P 500 and Nasdaq are holding up thanks to tech momentum, while small caps and manufacturing signal caution. Internationally, Europe and Canada face tariff headwinds, but China’s factory data offers a glimmer of hope. With Trump’s tariff reveal tomorrow, expect volatility ahead—keep an eye on tech and safe havens like gold.


69-D Chess: Always Read The Fine Print

The T&Cs of GameStop's now completed Convertible Bond offering are INSANELY BULLISH showing us a wicked sense of humor as GameStop holds all the cards with all the exits blocked.  When GameStop priced their $1.3B+ Convertible Bond offering last week, they provided a bit more detail about these Convertible Bonds. Devils are always in the details. As noted before [69D Chess: GME's $1.3B Bitcoin Move], these convertible bonds are essentially "free" money for GameStop as the notes have 0% interest and the principal will never go up.

GameStop Corp. (NYSE: GME) (“GameStop”), today announced the pricing of $1.3 billion aggregate principal amount of 0.00% Convertible Senior Notes due 2030 (the “notes”) in a private offering (the “offering”) to persons reasonably believed to be qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”).

The notes will be general unsecured obligations of GameStop, will not bear regular interest and the principal amount of the notes will not accrete.

Without interest or principal growth, these Convertible Notes have a guaranteed worst case scenario of losing value to inflation.  To address the question of why anyone want these, I Game Theory'd this out previously:

Friends Wanting Financial Benefits

(Yellow) There are 2 options where an investor loses where both involve trying to get in on these bonds and trying to screw GameStop. 

(Green) There are 2 options where an investor gains and both involve trying to get in on these bonds and supporting GameStop.  One possible investor is an existing GameStop supporter (e.g., Roaring Kitty, apes, etc...) and another is, for example, a short seller who desperately wants out.

A key feature overlooked by many is that GameStop decides at its election whether the bond payout is by cash and/or shares (i.e., cash only, shares only, or cash + shares).

Upon conversion, GameStop will pay or deliver, as the case may be, cash, shares of GameStop’s Class A common stock, par value $.001 per share (“Class A common stock”), or a combination of cash and shares of Class A common stock, at its election. [Press Release]

This election option is very critical because a cash payout is a definite loss for the Convertible Note holder.  The only way to benefit from these bonds is to stay on GameStop's good side until the bond pays out, with a target date of April 1, 2030. (That’s 5 years of good behavior.)

The notes will mature on April 1, 2030, unless earlier converted, redeemed or repurchased. [Press Release]

GameStop does have the option to redeem Notes after April 6, 2028, but only if GameStop's stock is solidly above $38.81 (i.e., above 130% of the $29.85 conversion price).

GameStop may not redeem the notes prior to April 6, 2028. GameStop may redeem for cash all or any portion of the notes (subject to the partial redemption limitation described below), at its option, on or after April 6, 2028, if the last reported sale price of the Class A common stock has been at least 130% of the conversion price for the notes then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period (including the last trading day of such period) ending on, and including, the trading day immediately preceding the date on which GameStop provides notice of redemption at a redemption price equal to 100% of the principal amount of the notes to be redeemed, plus accrued and unpaid special interest to, but excluding, the redemption date.

The conversion rate for the notes will initially be 33.4970 shares of Class A common stock per $1,000 principal amount of such notes (equivalent to an initial conversion price of approximately $29.85 per share of Class A common stock).

As for the Note holders wanting to exit, a window opens starting Jan 1, 2030 for Note holders to convert their Notes [1].

On or after January 1, 2030, until the close of business on the scheduled trading day immediately preceding the maturity date, holders may convert all or any portion of their notes at any time. [Press Release]

But before Jan 1, 2030, the only way out [1] is if the Note holder has met GameStop's conditions and the exit door is only open during certain times.

Before January 1, 2030, holders will have the right to convert their notes only upon the satisfaction of specified conditions and during certain periods.

You’re Locked In Here With ME [2]

When these Convertible Bonds are converted, GameStop decides at its election whether the bond payout is by cash and/or shares (i.e., cash only, shares only, or cash + shares).

Upon conversion, GameStop will pay or deliver, as the case may be, cash, shares of GameStop’s Class A common stock, par value $.001 per share (“Class A common stock”), or a combination of cash and shares of Class A common stock, at its election. [Press Release]

Example GameStop can choose to pay back a $1,000,000 Convertible Note in one of 3 ways:

  • $1,000,000 cash if GameStop elects to turn the Convertible Note into an interest free loan.
  • 33,497 shares of GME stock if GameStop elects to pay in shares at the initial conversion rate of 33.497 shares per $1000 (equivalent to approximately $29.85 per share).  This can be a great deal for the Note holder if GME is trading above $40 (e.g., at $100 per share the Note Holder is more than tripling their investment receiving $3,349,700 in stock).
  • A mix of cash and shares which allows GameStop to decide what rate of return a Note holder receives between the other two options.  For example, GameStop could give 3,350 shares plus cash (about $100k in shares at the conversion rate plus $900k in cash) which, if GME is trading at $100 per share, works out to about $1.235M (= $335,000 + $900,000); a decent return.

Interestingly, GameStop has also reserved a right to increase the conversion rate following certain corporate events or if GameStop chooses to redeem a Convertible Note.

In addition, following certain corporate events that occur prior to the maturity date of the notes or if GameStop delivers a notice of redemption in respect of the notes, GameStop will, in certain circumstances, increase the conversion rate of the notes for a holder who elects to convert its notes in connection with such a corporate event or convert its notes called (or deemed called) for redemption during the related redemption period, as the case may be.

As the conversion rate is defined as shares per $1,000 principal amount ("The conversion rate for the notes will initially be 33.4970 shares of Class A common stock per $1,000 principal amount of such notes..."), increasing the conversion rate means more shares (e.g., 69,420 shares instead of 33.497) per $1,000 principal which could be GREAT for certain note holders selected by GameStop.  It's not every day you see a company giving themselves the option to give more than the bare minimum required.

The Ultimate Trust Me Bro

Looking back at the Game Theory above, it's pretty clear that this structure only works for long term friends of GameStop because, at the end, GameStop chooses cash vs shares upon payout. Anyone caught faking their friendship will be punished at the end with inflation devalued cash.  Plus, GameStop has even given themselves the option to increase the conversion rate which is very clearly how they can reward better, closer, and best friends who can buy in at the bare minimum and reap unlimited rewards.

So the way these Convertible Notes are structured, the deal is built on trust in GameStop and, by extension, trust in Ryan Cohen.  Anyone taking this deal gives GameStop cash up front knowing that GameStop can choose to turn it into an interest free loan or choose to reward the note holder with greatly appreciated shares. Literally, Trust Me Bro.

For supporters of GameStop (e.g., Roaring Kitty, diamond handed apes [3], and maybe even Michael Burry [SuperStonk, SuperStonk]), we trust the DD, we trust GameStop, and we trust Ryan Cohen.  (We wouldn't be here otherwise.)  As long time friends who demonstrate trust in GameStop, GameStop can elect to reward that trust financially (i.e., by repaying in shares at the conversion rate that have significantly increased in value since and/or increasing the conversion rate to repay with even more shares than the initial conversion rate would require).

For new friends who might be former enemies (e.g., short sellers who decided to flip and join GameStop), they have up to 5 years to prove their friendship and loyalty (i.e., from now until 2030). Abandoning GameStop early (e.g., between 2028 [1] and 2030) or simply being a bad friend during that time probably isn't going to be rewarded financially as GameStop decides the payback upon conversion at the end of this deal.  This is important because Ryan Cohen and GameStop know that Wall St isn’t about friendship and loyalty, but instead self-serving greed where financial incentives can be quite motivating (see, e.g., the work by the Freakonomics people [Wikipedia]). With the guaranteed worst case scenario of an interest free loan, these Convertible Notes financially incentivize holders to support GameStop.

Who Can Try To Be Friends?

There’s been some discussion about who can participate in these Convertible Notes offerings.  To some extent there’s some truth in that these Convertible Notes and shares are not to be sold to US Persons (e.g., individual investors); until the Class A common stock shares are registered as securities (e.g., under the Securities Act).

Neither the notes, nor any shares of Class A common stock issuable upon conversion of the notes, if any, have been, or will be, registered under the Securities Act or any state securities laws, and unless so registered, may not be offered or sold in the United States, or to, or for the account or benefit of, U.S. Persons, absent registration or an applicable exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and other applicable securities laws. [Press Release]

If not US Persons, then who?  Institutions.  Specifically, qualified institutional buyers defined by Rule 144A.

GameStop Corp. (NYSE: GME) (“GameStop”), today announced the pricing of $1.3 billion aggregate principal amount of 0.00% Convertible Senior Notes due 2030 (the “notes”) in a private offering (the “offering”) to persons reasonably believed to be qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”). [Press Release]

Rule 144A [LII] defines who qualified institutional buyers are with a list of different types of entities (e.g., insurance companies, investment companies, retirement plans, and more) capable of trading $100M and may include “(J) Any institutional accredited investor”.  

Rule 144A [LII] also limits reselling of these privately placed securities to other qualified institutional buyers and these Convertible Bond securities can not be the same as those on a national securities exchange (e.g., where our GME Class A shares trade).

Rule 144A (formally 17 CFR § 230.144A ) is a Securities Exchange Commission (SEC) regulation that enables purchasers of securities in a private placement to resell their securities to qualified institutional buyers (QIBs) under certain conditions.

Generally, under Rule 506 of Regulation D , purchasers of securities issued in a private placement may not resell their securities. Rule 144A allows purchasers of such securities to resell those securities if: (1) the sale is to a qualified institutional buyer (QIB); (2) the seller takes affirmative steps to ensure that the buyer is aware that the seller relies on Rule 144A to sell their security; (3) the securities are not of the same class as securities traded on a national securities exchange; and (4) the purchaser has the right to request information from the original issuer of the security.

Therefore, any claims of dilution by these Convertible Notes are simply incorrect.  These Convertible Notes can only trade amongst qualified institutional buyers and must be different from our GME Class A shares trading on a national securities exchange.  

Even upon conversion, there’s no guarantee of dilution because GameStop can elect to convert all these Notes fully into cash (e.g., every Note holder gave GameStop an interest free loan).  If and only if GameStop decides to convert any Notes into shares (for good friends) 3 to 5 years down the road could there be any dilution and any amount of dilution is up to GameStop.  (And likely based on the future GME share price.)

As the incentive structure of these Convertible Notes rewards friends and punishes enemies, any future dilution is fully within GameStop’s control; thus almost certainly only for the benefit of good friends.  (As an example, I would welcome dilution for Roaring Kitty, who almost certainly could get qualified as a qualified institutional buyer if he wanted to.)

Good Friends vs Bad “Friends”

Good Friends Trust Each Other

[3]

Bad “friends” would neither trust nor support GameStop.  

[4]

Bad “friends” would probably arbitrage [Investopedia] the opportunity to acquire shares through a convertible bond (similar to convertible notes [Wikipedia], which probably contributed to shorts misunderstanding), hedging and taking a generally neutral overall position buying the convertible bonds while shorting the stock

What Is Convertible Bond Arbitrage? 

Convertible bond arbitrage is an arbitrage strategy that aims to capitalize on mispricing between a convertible bond and its underlying stock.

The strategy is generally market neutral. In other words, the arbitrageur seeks to generate consistent returns with minimal volatility regardless of market direction through a combination of long and short positions in the convertible bond and underlying stock.

The arbitrage strategy takes a long position in the convertible bonds while shorting the stock of the company.

Convertible arbitrage essentially involves taking simultaneous long and short positions in a convertible bond and its underlying stock. The arbitrageur hopes to profit from any movement in the market by having the appropriate hedge between long and short positions

[Investopedia]

Neutral is not supportive. If hedge funds hedge then a convertible bond arbitrage is, at least in part, a reasonable cause for the recent (March 27-28) significant drop in GME from $29.80 (March 26 High) to $21.73 (March 28 Close). Those arbitrageurs are pretty SHITTY “friends” that now can’t get out of their Convertible Notes for 3-5 years and stand a good chance of having their convertible note treated as an interest free loan to GameStop.  Short sellers who didn’t read the fine print just rushed to give GameStop money and showed GameStop why their money should be an interest free loan by hedging and selling more shares into the market.  Those short sellers will not be getting any shares in the future; digging the hole they are in even deeper.  (Hopefully, the convertible bond arbitrageurs actually secured Convertible Notes first; otherwise a failed arbitrage attempt is simply naked shorting with more unlimited risk.)

April Fools!

According to some Trust Me Bro sources [X: MichaelTLoPiano, GavinMayReal] demand for GameStop’s Convertible Notes is insane with claims of them being 5x over subscribed. 

Another Trust Me Bro source [X: Han Akamatsu, here too, and here three] says arbitrage desks don’t actually wait to settle their Convertibles before shorting the shares.  (Consistent with everything we’ve learned about the entire financial industry selling now, buying 🤷‍♂️…)

Corroborating those two Trust Me Bros: 

  • GME’s share price decline after the Convertible Notes were announced March 26 after hours,
  • GME’s elevated dark pool activity [SuperStonk], 
  • GME’s elevated off-exchange trading [SuperStonk],
  • GME’s extreme short volume at or near all time highs [SuperStonk, Superstonk, SuperStonk, SuperStonk], and
  • All of the above prior to Convertible Notes closing on April 1, 2025 (“The sale of the notes is expected to close on April 1, 2025, subject to customary closing conditions.” [Press Release])

TADR: A bunch of short sellers thought they would each be able to get GameStop’s Convertible Notes, but there were more short sellers needing shares in ~1825 tomorrows (i.e., 5 years) than there are Convertible Notes.  At least some of the short sellers jumped the gun shorting more GameStop stock possibly before making sure their convertible notes are secured.  (If they don’t get enough Convertible Notes, they just opened up a naked short position and shorts today are buyers tomorrow! 🤣) Even those lucky short sellers who did get Convertible Notes are quite likely to not get GME shares having just rushed into giving GameStop an interest free loan for the next 3 to 5 years; unless they can get on GameStop’s good side.

Short sellers really are dumb stormtroopers of the investing galaxy [X].  April Fool’s Suckers!

https://preview.redd.it/9i19vauc03se1.png?width=1172&format=png&auto=webp&s=b429f702a5974c8f9c9a51736f7e3a69eb8ebd69

Now What?

GameStop and their good friends are sitting pretty.  GameStop just got (better than) free money to buy Bitcoin which protects against inflation [SuperStonk]. Any good friends who bought Convertible Notes (e.g., Roaring Kitty, Michael Burry, Sultan, etc…) could easily do so at the bare minimum; trusting GameStop to reward them [5] while leaving as much of the Convertible Notes available as possible for the dumb stormtroopers and April Fools.

Any “bad friends” desperate to switch sides and exit are probably the only ones who read the terms carefully, understood what the deal is, and got Convertible Notes without shorting more GameStop. If there were any short sellers who wanted to flip, they are now in a position to do so, and will now do everything in their power to stay on GameStop’s good side for the next 5 years to maximize their future reward.

As for the dumb stormtroopers and bad friends… 

  • Those who shorted GameStop expecting to get Convertible Notes to cover their short and didn’t, now have a naked short to cover and/or close. More unlimited risk! Rule 204 requires settlement within 35 calendar days (“C35”) after the trade date (e.g., March 27-28).  
  • Those who shorted GameStop and got Convertible Notes are now doubly screwed as they shorted GameStop and will not get shares unless they satisfy GameStop’s conditions and get on GameStop’s good side. They rushed in to give GameStop an interest free loan (cue Shut Up And Take My Money meme), hedged, and are now quite literally at the mercy of GameStop. 🤣

If I were GameStop, a first step towards my good side would be if the Convertible Note holding short seller CLOSED THEIR SHORTS to show support.  And, thanks to the incentive structure of the Convertible Notes, short sellers with Convertible Notes are now financially incentivized to support GameStop against their short selling friends by actively managing and trying to drive GameStop towards fair market value [7] with $29.85 and $38.81 as the first milestones on the way up. 

$29.85 and $38.81 are just the first milestones on the way up

Notably, $38.81 is 130% above and beyond $29.85 which is above the March 26 $29.80 high by a nickel.  Short sellers with Convertible Notes are now financially incentivized to support GameStop stock stably above and beyond the $29.80 ceiling imposed by short sellers on March 26 [6].

Future Convertible Note offerings will be more expensive as the conversion price (based on GME stock price) goes up and the conversion rate (GME shares per $1000) goes down.  Those who accept future Convertible Note offerings will pay more to get the same incentive structure to close their short positions and actively manage GameStop stock towards fair market value [7].

As for the $200M option for more Convertible Notes (available until April 13), that’s a phenomenal way for Convertible Note holders to support GameStop and create a win-win situation for both. Thus, everyone opted to max out their Convertible Notes option immediately raising $1.5B for GameStop [Offering Complete].

TADR: In an EPIC April Fool’s joke (now completed), GameStop is monetizing $1.5B largely from their short sellers through Convertible Notes. Those with a good sense of humor will appreciate their opportunity to pay the exit tax today instead of tomorrow.

Footnotes

[1] There is actually one other really shitty exit option.  After April 3, 2028 Noteholders can "opt out" by basically electing to turn their Convertible Bond into an interest free loan to GameStop.  I can't imagine anyone taking this deal and then opting to walk away and eat the loss.

Noteholders will have the right to require GameStop to repurchase their notes on April 3, 2028, at a repurchase price equal to 100% of the principal amount of the notes to be repurchased, plus accrued and unpaid special and additional interest, if any, to, but excluding, the repurchase date. [Press Release]

[2] SuperStonk Source of Roaring Kitty tweet [X]

[3] Roaring Kitty “I need your help” tweet [X] and “it’s never been done before” tweet [X]

[4] SuperStonk Source

[5] Awarding shares into diamond hands does not create a dilution problem.

[6] The earliest possible "not terrible" exit starts April 2028 if, and only if, GameStop is stably trading above $38.81 and chooses to redeem some notes.

[7] “Markets are efficient because of active managers setting the prices of securities... trying to drive the value of companies towards where we think they should be valued” [Kenneth Griffin on SuperStonk transcribed, X, and YouTube].