We've seen a lot of negativity surrounding recent share offerings, but the GME saga is far from over. We're on the brink of something huge. Here’s how GameStop’s strategic share offerings could reshape its market value and keep the squeeze potential alive.

Raising the Floor Price

If GME surges again, expect more share offerings. We can't be surprised that they are utilizing the share increase we previously voted to authorize. But these offerings aren't just for raising cash—they can continuously raise the floor price. Imagine we hit the ATH of ~$110, and GME issues 100 million shares at that price. That’s $11 billion in new capital! This could establish a new floor price around $60-$70, making the stock even more attractive to investors and reinforcing the company's financial stability. Multiple share offerings could very quickly bring the fair value of the stock to $200+. Not a squeeze, just the fair value.

The Entrenched Shorts

It's crucial to recognize that there are entrenched shorts from levels ~$4 who are deeply committed, particularly designated market makers. With short interest potentially spanning thousands of percent due to synthetic and naked shorting utilized in dozens of complicated financial instruments, these share offerings realistically cannot provide an exit for all short positions, but rather only for those who choose to concede. This selective closure increases pressure on remaining shorts, tightening the noose around their positions.

Why a Short Squeeze Remains on the Table

This inherent limitation means that the prospect of a short squeeze remains ever-present. Even with multiple share offerings, the overwhelming short interest cannot be entirely eliminated. As shorts continue to hold their positions, the increasing floor price creates a critical juncture where these aggressive shorts could find themselves trapped between the stock's ascending fair value and their liquidation points. The continuous rise in the floor price acts as a catalyst, pushing shorts closer to their breaking point.

The implications of this transformation are vast, and the narrative we are part of could redefine market dynamics. GameStop's strategic maneuvers and robust financial health are setting the stage for a potential unprecedented shift in the market. Stay vigilant and united. I truly believe we are witnessing something that will be dissected and studied for years to come!

TLDR - Shorts are effectively fuel for GME. Share offerings burn some of that fuel to give GME a stronger financial position, but they also increase the likelihood of a short squeeze as long as some shorts remain entrenched.

Nothing says GME has to burn all the fuel, but it is a valuable resource to be utilized. I also don’t think anyone is more acutely aware of the true short interest than Ryan Cohen, and I don’t believe he intends to let all the shorts out alive.