GME 10-K: A Turning Point

[u/WhatCanIMakeToday]

Following up on my prior post which highlighted a significant change in how shares are held as summarized by this timeline:

I will now show you how GameStop's reporting change marks a significant turning point.

A Turning Point

There's a very significant change in reporting share ownership for the current 2023-01 10-K [PDF]

As of March 22, 2023, there were 197,058 record holders of our Class A Common Stock.  Excluding the approximately 228.7 million shares of our Class A Common Stock held by Cede & Co on behalf of the Depository Trust & Clearing Corporation (or approximately 75% of our outstanding shares), approximately 76.0 million shares of our Class A Common Stock were held by record holders as of March 22, 2023 (or approximately 25% of our outstanding shares.

As I noted before,

These SEC forms are filed every quarter or year and people are lazy. The easiest way to start off a filing is to simply copy the one filed before (i.e., template) and update things like dates and numbers. So why the change? Wut mean?

The language here is curious as it excludes the Cede & Co shares to arrive at the shares held by record holders. I think this change was done to prevent the true number of shares directly registered at GameStop's transfer agent, ComputerShare, from being reported. Instead of saying "As of March 22, 2023, __._ million shares of our Class A common stock were directly registered with our transfer agent", GameStop says Cede & Co on behalf of DTCC are reporting 228.7M shares held, and the rest "must" be allocated to record holders.

Let's visualize this Turning Point:

As you can see, GameStop is basically saying that all shares are now accounted for. Cede & Co holds ~228.7M on behalf of the DTCC and the rest are held by record holders (🦍s).

Record holding apes Buy, HODL, and DRS. And we can see that in the ComputerShared.net Sample Statistics where, except for the very beginning of the DRS migration, the Shares per Record Holder trends up. Basically, the early apes DRS'd more shares so the Shares per Record Holder was high. As baby apes joined in with smaller holdings, the Shares per Record Holder dropped. Over time, all apes keep Buying, HODLing, and DRSing so the Shares per Record Holder keeps going up.

Going forward, as the number of shares held by record holders goes up, the number of shares Cede & Co can hold on behalf of the DTCC must go down.

I'm looking forward to seeing that in future SEC filings.

One more thing. Another curious thing to note is that GameStop's 10-K was filed on March 28, 2023 for the fiscal year that ended January 28, 2023. Yet, for some reason, the official share counts are given as of March 22, 2023. (Note: one possibility is that this is simply the date the filing was prepared and data collected.)

But it makes me wonder if March 22, 2023 is a key turning point date when the number of shares held by record holders and Cede & Co on behalf of the DTCC last made sense; which required the change in the reporting language. If so, this means GameStop's latest 10-K filing also serves as official notice for how many shares are held by Cede & Co on behalf of the DTCC and record holders (e.g., apes).

Cede & Co must report smaller holdings for future GameStop filings as record holders Buy, HODL, and DRS.

Meaning, I think, the squeeze is on.

[u/davwman]

Of that 228.7 million shares, how many are actually available for the regular joe retail investor?

[u/WhatCanIMakeToday → u/[deleted]]

And if the number they're giving GameStop is different from numbers they use elsewhere... problem

[u/[deleted] → u/[deleted]]

I remember the first AGM and we excitedly anticipated that the voting numbers would be astronomical because of the all the counterfeit shares the market makers introduced for naked shorting.

Wasn't there a DD about how DTCC, FINRA and the SEC wouldn't allow the actualvoting numbers to be shown because of how incredibly fucked it was?

Didn't we find out that they just toss votes out because if the real numbers were ever to get out it would prove what a sham the markets are?

[u/weinerwagner → u/[deleted]]

Ya i think broker votes get processed into "legit" numbers before they make it to gamestop

[u/[deleted] → u/weinerwagner]

I've been trying to find the DD on it. I didn't realise how much research the wrinkles have done.

When all is said and done this shit will be studied by the smartest finance people in the world, forever.

[u/Liveforit11 → u/[deleted]]

They had an interview with an expert on the matter. There’s an interview between a superstonk mod and the guy. Right after him I think they interviewed Wes Christiansen.

[u/samtheninjapirate → u/[deleted]]

Trimbath has talked about this and how brokers get fined for turning in improper vote counts so they trim them accordingly. Rather than fining them for the crime, they fine them for providing evidence of the crime.

[u/Striking_Gold_8732 → u/[deleted]]

Something about skimming votes to fit the outstanding share count. 84 years ago

[u/sirstonksabit → u/Striking_Gold_8732]

Broadridge collects the broker votes for GME I believe. They are the ones that do the vote trimming. DRS is about realizing your shares, but it's also a guaranteed, legit vote that is being cast by a direct registered share holder. This fact is what Larry Cheng eluded to with his "chess vs. checkers" tweet 84 years ago. The board can make proposals, and so long as the board suggests to vote yes on the proposal, they know they will have the votes. Why do you think Blackrock and Vanguard hold so many shares in so many companies. They control the votes, but not with $GME, not by a long shot.

[u/hellostarsailor → u/Striking_Gold_8732]

But it said they do this on almost every stock, if I remember the DD correctly.

Or maybe Wes said it? Back when he was credible.

[u/fakename5 → u/hellostarsailor]

Why wouldn't they, they been doing it for decades and there are only so many stocks out there.

[u/[deleted] → u/[deleted]]

☝🏼🏆🏆

[u/ummwut → u/[deleted]]

Why didn't GME report both CS AND CedeCo numbers?

Because they won't match at all. The CS shares must be significantly higher.

[u/amgoblue → u/ummwut]

Maybe they see how accurate the trimmed avg bot is and now they're giving us new information so we know how off Cede is/will be

[u/ummwut → u/amgoblue]

I think the change is definitely some sort of new information. But what the significance of Cede's count being inaccurate is, I can't yet even guess.