Tuesday, December 8th.
New York At 4:03 pm, GME's Q3 Report was pushed to all financial terminals through Business Wire's press release system.
Zhao Chen was sitting in Era Vanguard's office, looking through the nickel plate purchase schedule submitted by Lin Shicheng, when the Financial Report news from Bloomberg popped up in the lower right corner of the screen.
He put down the document in his hand and clicked on the press release. Lin Shicheng stood up from his workstation, walked to the conference table with his coffee, and his eyes fell on the screen of Zhao Chen.
The core number of Q3 Report is only a few lines.
Revenue was US Dollar, a year-on-year decrease of 30.2%, lower than market expectations of 1.09 billion.
The adjusted loss per share was 0.53 US Dollar, an increase from the 0.49 US Dollar loss in the same period last year, but better than the 0.85 US Dollar loss analysts expected.
Comparable store sales fell 24.6 percent year over year.
The company also announced that it has signed an agreement with Jefferies to sell up to $100 million of Class A common stock in the open market.
No forward guidance was given.
The only positive word is that it expects to achieve positive comparable store sales growth and profitability in the fourth quarter.
"The loss per share is better than expected, but the revenue is too far behind. We need to issue an additional 100 million US Dollar shares."
Lin Shicheng put the coffee cup on the table and pointed at the line of revenue numbers.
"The market doesn't look at losses per share. They only look at revenue and additional issuances.
Revenue has dropped by 30%, and new shares have to be sold to dilute shareholders' equity. This Financial Report is a gift to Short Sellers."
Zhao Chen read the press release from beginning to end and stopped at the last paragraph.
GameStop CEO George Sherman said something in Financial Report--
"Our third-quarter results were in line with our subdued expectations, reflecting the pressures faced operating at the end of a seven-year console cycle and during a global pandemic."
This sentence is true, but the market does not need the truth, the market needs a story.
Q3 Report No story provided.
What it provides is a string of numbers proving that GME is still shrinking.
After-hours trading data quickly popped up.
GME's stock price plummeted from the closing price of 16.24 cents.
It dropped to 14.8 at 17:30, to 13.5 at 18, and to 12.1 at 19.
It fell more than 17% after hours.
Trading Volume exceeded 5 million shares within one hour after the market opened, which was more than ten times that of Trading Volume after the market opened.
Zhao Chen leaned on the back of his chair and looked at the post-market time-sharing line on Bloomberg Terminal that kept hitting new lows. He did not give any instructions.
Era Vanguard's Common Stock position is about 1.95 million shares, and the average cost price is about 20 US Dollar.
Calculated based on the post-market price of 12 yuan, Common Stock's floating loss has exceeded 15 million US Dollar.
The floating losses on the Options side are even greater - those Call Options with twenty-five and thirty US Dollar as Strike Price,
When the stock price dropped to 12 yuan, Time Value was rapidly evaporating.
"What about the exposure?" Zhao Chen asked.
Shen Zhiyi walked over from the Legal Department's workstation, holding the newly updated exposure monitoring report in his hand.
"The stock price dropped to 12 yuan after the market closed, the delta value of Options dropped significantly, and the conservative discounted exposure fell from 4.91% to about 4.3%.
Common Stock's market value has shrunk, and its exposure has been passively shrunk."
She placed the report in front of Zhao Chen,
"According to Buffer Zone Mechanism, no operation is required to reduce the exposure. There is no need to sell Common Stock, and there is no need to adjust Options."
Zhao Chen turned over the report and signed it.
GME's after-hours stock price briefly stabilized around 12 yuan, but no one knows what will happen when the market opens tomorrow.
Wednesday, December 9th.
GME opened at 12.10 cents, 25% lower than the previous day's closing price.
In the first hour after the market opened, selling orders poured out like a flood from a dam, and the stock price fell from 12 yuan to 11.5 yuan, and then to 11 yuan.
Short Sellers took advantage of the bad news of Q3 Report to concentrate its efforts, and Trading Volume broke through 20 million shares in the first hour.
Zhao Chen sat at the conference table and looked at Bloomberg Terminal. The tea in Zisha Pot had gone cold, and he did not let Su Wantang continue.
GME's Short Selling ratio not only did not decline today, but continued to rise--
Short Sellers is taking advantage of the opportunity of Q3 Report to add to Short Selling, betting that GME will fall back to single digits in the next few weeks.
Thursday, December 10th.
GME closed at 11.8 cents, down more than 27% from the previous price of 16.24 cents before Q3 Report.
Era Vanguard's Common Stock floating losses exceeded 20 million US Dollar, Options Premium's Time Value losses are also accelerating.
Lin Shicheng puts the position summary on the Zhao Chen table after the market closes.
"Common Stock 1.95 million shares, the average cost price is about 20 US Dollar, the current market value is about 23 million US Dollar, and the floating loss is about 16 million.
Options totals Premium 18 million, the current market value is about 7 million, and the floating loss is about 11 million. The overall floating loss is about 27 million."
He turned the summary table to the last page,
"Exposure monitoring did not trigger any actions.
The conservative discounted exposure of Common Stock plus Options is approximately 4.1 percent, below the upper limit of 4.99 percent."
Zhao Chen flipped through the summary table and put it on the table.
He did not say whether to stop the loss, whether to Add Position, or whether to adjust the Options structure.
He just picked up the hot tea that Su Wantang had just refilled and took a sip, his eyes falling on the Manhattan night outside the window.
"Waiting for the short report on Citron."
December 11, Friday.
GME fluctuated within a narrow range around the eleventh block, and Trading Volume began to shrink.
The impact of Q3 Report is being digested, but the market's attention has not left GME.
The number of discussion posts on WallStreetBets Forum nearly tripled after the release of Q3 Report. Some people were panicking, some were Add Position, and some were calculating the average cost of Short Sellers.
Keith Gill--DFV, the Boston financial analyst who posted screenshots of his holdings on WSB for more than a year--
No new posts have been posted since Q3 Report posted.
His last post was on December 4th, and the screenshot shows that the market value of his GME holdings is approximately 3.4 million US Dollar.
Some people on the forum began to speculate whether he had already cut off his body and left the scene.
Monday, December 14th.
GME opened flat at 11.2 yuan, fell to 10.8 yuan during the session, and pulled back to 11.5 yuan in late trading.
Trading Volume shrank to 8 million shares.
Zhao Chen was looking through WallStreetBets Forum's popular posts after the market closed, and a title caught his attention--
"DFV hasn't posted for ten days. Did he run away?"
The replies below the post were divided into two groups. One group said, "He must be secretly Add Position",
The other group said, "He can't carry it anymore. The position of more than 3 million, Q3 Report, has dropped by more than 20%. No one can carry it."