00:00okay folks so GameStop Had A peculiar
00:02and thought-provoking spike in the after
00:04hours on Friday and there are major
00:07reasons to expect a pretty wild open
00:09come Tuesday in fact over in Germany
00:11where markets were open today well
00:13GameStop had a very very very positive
00:16session going up nearly 38% which left
00:19the Germans saying y ya Games Stop nine
00:22stopping so in today's video I want to
00:23go through number one why the spike in
00:25the after hours number two what just
00:27drastically changed on GameStop's
00:30balance sheet and number three why
00:32exactly the short squeeze setup has just
00:34become a lot more ripe we'll be covering
00:36the next Catalyst for gam stop coming on
00:38June 5th and then at the end of the
00:40video we'll break down our Lucy Squeeze
00:41Play which went up some
00:43373 briefing price to highs on Friday
00:46we'll put all the time stamps down below
00:47and before we get into it make sure to
00:49do your own research on all ideas
00:50presented here on the channel if you're
00:51the one taking the risk you got to be
00:52the one doing the ultimate Frisk also
00:54happy Memorial Day I want to take a
00:56moment to acknowledge and recognize and
00:57appreciate the many American troops who
00:59gave the UL imate sacrifice for this
01:01country absolute Heroes thank you very
01:03much and we do have our Memorial 50 sale
01:05if you want to get 50% off either zip
01:07you or zip options we've had some pretty
01:09big winners in our options program as
01:11well as our ZIP Trader youu program as
01:13of the last couple of weeks because this
01:15is a really really hot market so you
01:17might want to give it a look before the
01:18sale ends okay let's get to work and
01:20let's start with the context first so
01:22Gamestop start seeing an increase in
01:23trading volume and activity somewhere
01:25around the 2nd of May and then Sunday
01:28the 12th roaring Kitty Tweets in that
01:30starts open Monday the 13th off pretty
01:32damn hot and then by open on the 14th
01:35you've already hit a new high at 80
01:37bucks after that the stock Falls gme
01:39sees huge dumping in the pre-market on
01:41the 15th and then on Friday the 17th gme
01:44has a final fatal blow where they submit
01:46a filing registering the right to do an
01:49offering this kills off a lot of the
01:50enthusiasm that Roar and kitty had
01:52really catalyzed and all of a sudden
01:54that upward sentiment volume no longer
01:56comes in then a week passes and same
01:59thing not much look at achieving a
02:00Resurgence but then Friday in the
02:02aftermarket you get a noticeable pickup
02:05now why would people start buying right
02:07before a 3-day weekend while GameStop
02:09posted that they completed their
02:10offering quote on May 24th 2024 GameStop
02:14announced that it has completed its
02:15previously disclosed at the market
02:17Equity offering the ATM program the
02:19company sold the 45 million shares of
02:22its common stock registered under the
02:23ATM program for aggregate gross proceeds
02:26before commissions and offering expenses
02:27of approximately 9334 million bucks now
02:31if you go a little bit more into this
02:32press release it says quote GameStop
02:34intends to use the net proceeds from the
02:36ATM program for General Corporate
02:39purposes which may include Acquisitions
02:41and Investments now the thing that you
02:42need to keep in mind with GameStop is
02:44that it is not exactly a sinking ship
02:46the idea that short try to paint on this
02:49stock is that it deserves to go to zero
02:51sure this company has been flirting back
02:53and forth around the line of
02:54profitability but no way is this
02:56anywhere near a sinking ship gme put out
02:59a preliminary report 10 days ago and
03:01said that their net loss is expected to
03:03be in the range of 27 million to 37
03:05million bucks for the first quarter 2024
03:08but compared to how much money this
03:09company has on its balance sheet
03:10especially after this offering well this
03:12loss is really pennies and there's a lot
03:14of reasons to believe that if you look
03:16at the full year for 2024 we're going to
03:18end up profitable anyways and in fact if
03:20you look at the last reporting from Q4
03:23well GameStop was profitable and they
03:24swung profitable in fiscal 2023 after a
03:27net loss in 2022 even though 2023 is
03:30first quarter they had a net loss this
03:33first quarter's expected net loss is an
03:35improvement from the net loss in last
03:36year's first quarter of 50.5 million
03:38bucks and again over the course of the
03:40full year last year they still turned a
03:42profit the truth is that q1 has
03:44historically tended to be pretty weak
03:45for GameStop if you go back to that last
03:47official report the Q4 report well net
03:50income was posted at $63.11 million they
03:52also already had a pretty decent chunk
03:54of cash cash equivalents and marketable
03:56securities as well at about $1199
04:00so when this company is going and
04:029334 million more it does indeed hurt
04:07the imminent squeeze thesis in the sense
04:08that there's around 15% more shares
04:10outstanding now which makes the Short's
04:13job easier to do in the shorter term but
04:15at the same time it actually helps the
04:17medium to long-term squeeze thesis how
04:20exactly Charlie charito well because it
04:22gives the squeeze thesis more time to
04:24play out if Shorts are betting that this
04:26company is going right towards zero well
04:28they need a bankruptcy to make that
04:30happen GameStop is certainly seen sales
04:31slag a little bit but bankruptcy hell
04:34not a hedge fund manager just told qz
04:36and this quote was circulated everywhere
04:38that quote most people think the
04:40company's going to go bankrupt now if
04:41you never read a balance sheet
04:43absolutely you're going to think
04:44GameStop's going to go bankrupt but if
04:46you read their balance sheet you would
04:47have to get your head examined if you
04:49think that GameStop's going to go
04:50bankrupt the company was profitable last
04:53year and may end up being profitable
04:54this year and if not even if it loses a
04:56couple hundred million dollars they've
04:58got tons of BU Zone the whole short
05:00thesis is this company is going bankrupt
05:03and that doesn't make any sense in any
05:05reasonable time Horizon remember in
05:07order to go bankrupt you have to not be
05:08able to pay your bills GameStop is not
05:10like a super exciting business model but
05:12they're able to pay their bills and even
05:14if they're losing a little bit of money
05:16on a quarter by quarter basis it's still
05:18not nearly enough to go anywhere near
05:21bankruptcy risk with this recent
05:23offering they now have some2 billion in
05:25cash cash equivalents and marketable
05:27securities to work with and the market
05:29cap of the company is only $ 5.82
05:31billion that means that over 30% of the
05:33market cap is in direct near cash assets
05:37this gives GameStop one major advantage
05:39that short sellers have continued to
05:40dismiss and that is time the big t-w the
05:43GameStop squeeze thesis is so strong
05:45because quite frankly GameStop doesn't
05:47need to thrive they just need to survive
05:50and Outlast the short Sellers and this
05:52money and the current fundamentals of
05:54the company support them surviving for
05:56quite a long time but Charlie wait debt
05:59debt debt GameStop has too much debt
06:01GameStop must go down that is what I
06:03read from the short Sellers and that is
06:05why I've decided to also short sell the
06:08stock Charlie people say that all the
06:10time I read that in the comment sections
06:11but again I don't know exactly where
06:13this idea comes from because if you look
06:15at the public disclosures that gme has
06:17to file legally well it says that
06:19long-term debt remains limited to a
06:21lowest unsecured Term Loan associated
06:23with the French government's response to
06:25covid-19 but their latest filing shows
06:27that that debt is about 17.7 million in
06:30long-term debt which again they could
06:31easily pay with their some $2 billion in
06:34cash but they don't because presumably
06:36they like the low interest rate and then
06:37you could say but Charlie what if they
06:38start losing hundreds of millions of
06:40dollars again well okay but again they
06:41have $2 billion in cash and if they
06:43wanted to they could start cutting some
06:45of the unnecessary expenses like that
06:48downsizing would be very very easy for
06:50GameStop to do but they don't need to do
06:51it and in fact it doesn't even matter if
06:53they do because at the end of the day
06:56the game is not if GameStop is going to
06:58be a majorly profit company it's rather
07:00if GameStop can survive long enough to
07:03completely destroy the bankruptcy thesis
07:05and the numbers in my opinion and if you
07:07look at the balance sheet suggests that
07:09yes they will survive long enough so
07:11right now we're in a situation where
07:12short sellers are running the clock on
07:14their borrow fees paying tons of money
07:16out the rear end to continue shorting
07:19the stock at the same time where
07:20GameStop's clock for survival is
07:22becoming more and more indefinite now in
07:24many ways this is the same story as 2021
07:27shorts betting against the company while
07:29retail makes the short thesis less and
07:31less likely to pan out and you could say
07:33well Charlie you know what I've heard
07:34all of these Arguments for gme back then
07:37but quite frankly most retail that
07:38bought the stock and held all this time
07:41have been left holding the bag and maybe
07:43at best they're at break even why are
07:45you not talking about the opportunity
07:46cost with the gme play why are you not
07:49talking about all the better ways that
07:50you could have invested your money than
07:52the squeeze setup that literally was
07:54down for years well certainly you're
07:56right to question that and I would never
07:57say that there's one way to play GM
07:59there's multiple different ways that's
08:01why we alerted gme options before one of
08:03their biggest running days this year and
08:05those calls went up approximately 279
08:07per alert price the highs that's why we
08:09also alerted it in zip Trader U for
08:12people that wanted to trade the stock
08:13and get in and get out and those runs
08:15were just a few weeks ago there were a
08:17lot of trading opportunities but at the
08:19same time for folks that did want to buy
08:20the dip low and then ride the momentum
08:22as the next wave of attention comes in
08:24well that was another very effective
08:26strategy right the people that bought
08:28and held at low price
08:30that was an effective strategy so the
08:31point is there's no doubt that there are
08:32different ways to play this stock now
08:34I'm not going to tell you what you
08:35should do you may think that gme should
08:37be avoided entirely you may think it
08:38should be bought and held you may think
08:40it should be traded you may want to
08:41trade just options on it which strategy
08:43you choose is up to you but all that I
08:45am saying here and the main thing that I
08:47want to get across with this video is
08:49that the thesis that this is going to
08:51zero is horribly horribly Incorrect and
08:53in fact the thesis that you get another
08:55round with a much much bigger squeeze to
08:58the upside in my view is all but
09:00guaranteed whichever way you approach
09:02that information is up to you by bigger
09:04picture to answer the question why did
09:06we get that after hour Spike on Friday
09:09and why did we get that rally today in
09:11deuts land's Market well the reason is
09:13because GameStop investors see gme as
09:15free and clear for the next round of
09:17momentum and the next round of efforts
09:19towards a squeeze with solution behind
09:22us they see the setup as back on that's
09:24my take so the next part I want to
09:26discuss with you is the upcoming
09:27Catalyst for the stock which is going
09:29out on June 5th now here's the thing if
09:31you study their last balance sheet $921
09:33million of their current assets are cash
09:35and cash equivalents presumably after
09:37the $933 million offering you're looking
09:40at just under 1.9 billion in straightup
09:42cash but what about this section here
09:44marketable Securities what are
09:45marketable securities well in their
09:47filing it says these are largely
09:49short-term fixed income securities
09:51probably T bills which means these
09:53probably went up marginally since the
09:55last report so from a balance sheet
09:56perspective you're going to see very
09:58very healthy balance sheet but what
10:00about from a revenue and or profit
10:02standpoint well here's the thing we
10:03already have that preliminary data so
10:05markets are prepped for the bad slightly
10:08bad news of a net loss in the range of
10:1027 to 37 million and a net sales slump
10:13but in my mind look you have this report
10:15coming out markets already prepared for
10:17that part of bad news but they're also
10:19starting to look at that really really
10:20good news which is gme has a lot more
10:22time to squeeze it wasn't anywhere in
10:24your bankruptcy before but now you have
10:26all this extra Capital which gy could
10:27use to war It Off more short seller
10:30attempts at suppressing the price by
10:32investing in things that will produce
10:33more Revenue generation and more
10:35profitability and more stability and a
10:37lot more time to completely destroy the
10:39short thesis so in my mind GM's earning
10:41should be a net positive Catalyst to
10:42look forward to what do you think about
10:43gme let us know in the comments section
10:45down below we love hearing from you do
10:46you think we're going to head for a new
10:48squeeze do you think this is going down
10:49do you think there's going to be another
10:50offering around the corner you can let
10:51us know down below okay moving on Lucy
10:54Lucy Lucy mcy so context we briefed on
10:57the lovely Lucy at roughly 24 cents a
10:59share Friday morning and it proceeded to
11:01run to $114 at highs towards close
11:04around a 373 per briefing price to highs
11:07run what's the deal with the stock well
11:09Lucy goosey is innovative eyewear Inc
11:11and it's a company that specializes in
11:13the development and sale of smart
11:14eyeglasses and sunglasses and prior to
11:16Friday's trading Lucy was trading at a
11:18steep steep discount from its real value
11:21Thursday they were trading at a market
11:22cap of $3.3 million but if you look at
11:24their balance sheet they had 2.64 eight
11:27million in straight up cash and 4.81 3
11:29million in total assets liabilities at
11:31the same time were just
11:3391,000 you subtract liabilities from the
11:35assets and well that means that you had
11:37about $2.9 million in net assets and the
11:40market cap was only at $3.3 million at
11:42the same time this company is on the
11:44precipice of many different AI catalysts
11:46and had a huge history of Spike ability
11:48but that was only a foundation for what
11:50made the stock a good setup it wasn't
11:52really the reason that we briefed on it
11:53we would never have briefed on it if it
11:54didn't have some sort of catalyst to
11:56create an acknowledgement of that solid
12:00foundation of being undervalued in fact
12:02the main reason we briefed on The Lucy
12:03goosey in the pre-market was because it
12:05had this unusual volume driven price
12:07spike and we know that Lucy has a
12:09long-term history of huge Spike ability
12:11based around catalysts and volume price
12:13spikes usually related to their AI
12:15exposure if you remember last summer we
12:16were covering this in- depth with their
12:18chat GPT partnership and all the spike
12:20ability that happened back then so what
12:22exactly is the takeaway from this run
12:23well the takeaway is that getting up
12:25every morning doing your research in the
12:26premarket and finding real Catal s and
12:29real technical patterns and volume
12:32tracing well all of those things can go
12:34a long way in allowing you to trade and
12:38hopefully profit from some of the
12:39biggest Catalyst runners in the market
12:41and we do our best IN Zip Trader use
12:43morning briefings every single Market
12:45open morning as well as in zip Trader
12:47options alerts to bring you the
12:49catalysts and ideas that we think are
12:51very very likely to run and cough cough
12:54coupon code Memorial 50 will get you 50%
12:56off those membership fees but the
12:58biggest takeaway is frankly that yes the
13:00market is really really hot right now
13:01the meme trade is alive and it is
13:03specifically focused retail is
13:05specifically focused on stocks that have
13:06been unjustifiably beat down
13:09specifically especially in the small cap
13:12market and are ripe for a Resurgence
13:14this is a market where short sellers
13:15especially those in the small cap Market
13:17have to watch their back and where
13:19retail Traders have to lick their lips
13:21because there's more and more
13:22opportunities every day anyways have a
13:24great rest of your day I hope you
13:25enjoyed your Memorial Day with your
13:26families and I do want to give a final
13:28shout out out to our troops thank you so
13:30much for your ultimate sacrifice and
13:32we'll see you in the next video
