https://youtu.be/GgJB5VGJQhw

Recap: No fluff, no speculative language, no forward guidances, no Q&A, only French baguette. GameStop is running a business that appeals to shareholders and customers alike. Near-term profitability and long term growth is their focus and bullish. Here’s why—

GameStop just reported that they are experiencing free cash flow. If you are unaware of what this is, check out this video posted by another ape—they deserve credit for finding this video, regarding free cash flow, play video at 5:07.

With free cash flow, GameStop is now free to invest in what they believe will bring greater value to their company. Now I checked past quarters earning calls and none of this language was seen nor heard, only discussed in this subreddit, until now; GameStop explicitly stated in this earnings call that they are now exploring potential mergers and acquisitions at the “right price point”.

Similar to how they announced exploring crypto and digital assets in June 2021. Exactly a year later, they released the beta marketplace. Now no timeline for the M&A, as they have to dot their i’s and cross their t’s. If we follow the same pattern and trends on what they are planning to accomplish, a potential M&A is likely, close to, in the process, or nearly complete!

Now let’s get to the juicy stuff.

Y’all remember back in November 4, 2021, GameStop “entered into a new $500 million global asset-based revolving credit facility (“ABL Facility”) with a syndicate of banks”? No?

Well, now with this new loan credit facility, they now have lighter convenants, as we learned that their old credit facility (agreement) of $420 million prevented distribution of dividends. This is is important because the restriction from paying out dividends meant shorts could hold their positions indefinitely and free from the threat of paying out on the cost of dividends. And now with this new ABL credit facility, GameStop could have released a dividend at any point. Why haven’t they?

In simplest terms, large investors want to see a company improve their performance. In addition ABL is usually for items that they can quickly turn around and pay off like a credit card.

If we wanted to take this a step further, what if the asset used for this loan agreement was for something like an NFT? One: Gamestop’s agreement with WF and syndicate of banks is kind of obscure.—as in, do we know exactly what was underwritten? likely not, and who are these banks?; two: Typically, if you are a short seller and the company provides a dividend, short seller has to to pay out for every share they shorted. Source

Okay, try to follow my logic here

What if this ABL credit facility will be used to fund the distribution of the NFT dividend. And the agreement is that the only line that GameStop is on the hook for is the cost to mint? Shorts must buy back all the dividends… which could pay back the loan after let’s say very few transactions. And, if none of them are able to buy back all dividends cause the cost is too prohibitive, what would happen with shorts’ positions? 😏

Edit 1: ABL assumes the risk to the lender and I simply provided a hypothetical, but let’s assume that the ABL agreement was simply a way for GameStop to create a lighter covenant, one that would allow them to distribute a dividend at any time.

Part 2 here.

u/1twowonder u/the_Lauz

This is for y’all 😎