00:00okay folks so in today's video I want to
00:01give you a pragmatic look at the current
00:03gme situation we're going to be talking
00:05about three different things today a why
00:08I believe the GameStop story matters B
00:10whether I believe there is legitimately
00:12money to be made here and through which
00:13methods and then finally we're going to
00:15be talking about the unique opportunity
00:17that GameStop has to completely pivot
00:19and become something closer to a
00:20Berkshire Hathaway and as always make
00:22sure that you do your own due diligence
00:23on all ideas presented here on the
00:25channel if you're the one taking the
00:26ultimate risk you got to be the one
00:27doing the ultimate Frisk and today's
00:29video is sponsored by our free ZIP
00:30Trader newsletter you can sign up with
00:32that link down below I've been traveling
00:33around the Greek Islands the last week
00:35or so and while I haven't been able to
00:36make as many videos we have been sending
00:38out near daily email breakdowns on
00:40what's going on and our research and the
00:42top ideas so make sure to sign up and
00:44don't miss those reports okay so I want
00:46to get into why this gme situation
00:48actually matters so at the end of the
00:50day we as retail Traders investors
00:52Market participants we enter the market
00:55with the goal of making money the
00:57financial system is set up in a way that
00:58if you decide to just keep your
01:00hard-earned money saved in an account it
01:02gets eroded through inflation you work
01:03hard to make your money the government
01:05takes nearly half of it away through
01:07taxation even before you start talking
01:09about property taxes and sales taxes and
01:11blah blah blah taxes and whatever's left
01:14they take through inflation and so the
01:16only way that we have left to protect
01:18ourselves is essentially by investing
01:20our savings in a investment whether
01:23that's the stock market or real estate
01:25but the stock market is the most
01:26accessible but of course the market is
01:28not a fair Place sure the American
01:30Market is the best in the world but it's
01:31certainly not a fair place at all and
01:33it's increasingly unfair year after year
01:36after year in fact the very same people
01:37that run and maintain the overall system
01:39that we have well they themselves abuse
01:42it why do I say abuse what do I mean by
01:44abuse well I can't imagine any other
01:46reason why Congress would continue to
01:48beat the market year after year after
01:50year and why some would see not just
01:52above normal returns but many multiples
01:54above normal Congress will vote to shut
01:56down the economy and then at the same
01:58time make trades based on that
01:59information before that information even
02:01becomes public Congress will buy War
02:03stocks and then vote on a war Congress
02:05will see a war coming and then buy more
02:07war stocks Congress will buy tech stocks
02:09and then vote on Monopoly Powers but
02:11what about Wall Street what about the
02:13absolute murder That Wall Street gets
02:15away with because of the direct line
02:17communication they have with Congress
02:19why do you think that Wall Street is
02:20spending billions and billions of
02:22dollars on political campaigns it's
02:24simply because they treat influenc in
02:26the government as a cost of doing
02:27business and quite frankly this is bipar
02:30based on the year and era you look at
02:32Wall Street may be giving more to one
02:34party or the other but they always give
02:35and they give to both parties if you're
02:37a fund on Wall Street and you're not
02:38giving money to politicians well you're
02:40going to be out of business real fast
02:42because all of your competitors are and
02:44they're getting some unfair advantages
02:45from that why do you think Mr SPF gave
02:48so much because he knew that there is
02:50power in donations in my opinion his
02:53biggest mistake was he didn't donate
02:54enough and so folks when you live in a
02:56world where you have absolutely no
02:57choice but to invest in the stock market
02:59and that stock market has a lot of other
03:01players exercising undue advantage in it
03:03well it becomes very very frustrating to
03:05say the least but Charlie what exactly
03:07does this have to do with GameStop well
03:09GameStop is simply a crossing point
03:11where retail Traders have identified a
03:14company that they like at the same time
03:16when many large institutional big money
03:18short sellers have decided it's a
03:19company that must go bust must
03:21completely die and because of that we've
03:23had the first time where many many many
03:25retail Traders and investors and
03:27participants have gotten together and
03:28shared their dueil and their overall
03:30breakdown on this stock and in doing so
03:32brought to light a lot of the corruption
03:34and unfair situations that happen when
03:37you got a stock like this now certainly
03:39the gme movement hasn't been perfect
03:41there's been no shortage of folks
03:43spreading misinformation and people
03:45buying based on misunderstanding but
03:46nonetheless the story here is that folks
03:48came together to share research and that
03:51shed light on a lot of unfair advantages
03:55and practices that have been going on on
03:57Wall Street for decades and that's why
03:59this matters and you may think but
04:01Charlie okay wait a second with all
04:02that's going on that's bad in the world
04:04how can this situation matter so much
04:06why does this situation matters so much
04:08I mean it's not like there's a war going
04:09on here well quite frankly I mean
04:12there's a fight against the middle class
04:13in almost every country especially in
04:15America I'm not in America right now I'm
04:16in Greece but in America as well as here
04:19and in all of Europe there's a fight
04:21against the middle class and a lot of
04:22politicians are trying to take away more
04:24and more rights of the middle class and
04:25arm the most powerful people in society
04:28and fighting to give every body a fair
04:30shot through a fair and free market is
04:32so important okay Charlie that's great
04:34but look I didn't go into the stock
04:36because I'm a revolutionary I went into
04:38the stock because I wanted to make money
04:40so is there legitimately a way to make
04:42money in the stock well I think that
04:45regardless of whether the stock
04:46ultimately makes people money or not I
04:48think that it was a win because it
04:50brought to light a lot of the injustices
04:52in the system however I also think
04:53there's a few different ways that it's
04:55going to be possible to make money in
04:56this obviously there's four different
04:58routes you can generally take with this
04:59you could trade shares you could trade
05:01options you could holdal until the
05:03massive squeeze if that happens or you
05:05could do a long-term investment so
05:07obviously trading in shares is pretty
05:08straightforward you buy the stock low
05:10you ride the momentum you have a stop
05:12loss and then you take profits because
05:14the stock has gone up and down so many
05:16times that's been a very very effective
05:18strategy options also fairly
05:19straightforward royan Kitty built out
05:21his 9 plus million share position this
05:24way buying call options exercising call
05:26options owning more shares rents and
05:28rebating you can also alternatively
05:30elect to sell the call options or
05:32exercise them and sell the shares you
05:33can elect to hodle until whatever you
05:35deem as a massive squeeze happens or you
05:38can invest longterm in the company but
05:40which is the most appropriate which
05:41makes the most sense obviously you got
05:43to do your own research to come to your
05:44own conclusion on this but my view here
05:46is that clearly trading shares and
05:48options has been incredibly profitable
05:50for many people and when you do that
05:51there's ways to benefit from not just
05:52the stock going up but also when it goes
05:54down when it bounces back up the back
05:56and forth there's opportunity and
05:58volatility obviously this is a trading
06:00channel so respect that I'm coming from
06:02that perspective there was a period
06:03where our alerted gme calls went up some
06:0510x and I'll continue to try to find
06:08those plays but at the same time I also
06:10believe there's opportunity as a bigger
06:12picture Squeeze Play If short sellers
06:13are banking on GameStop going bankrupt
06:15well it's going to be a long wait the
06:17company has so much cash on its balance
06:19sheet that it could simply invest in t-
06:21bills and erase its recent quarterly
06:22losses easily for those Believers in a
06:24bankruptcy obviously that's not
06:26happening anytime soon this company has
06:28a decade plus left so from a logic
06:30standpoint if you're in over your head
06:31shorting the stock it makes a lot of
06:33sense to expect a longer term squeeze
06:36now big caveat here just because you
06:38have a great setup now doesn't mean you
06:39always will I saw a really nice squeeze
06:41opportunity with AMC many years ago but
06:44what AMC proceeded to then do was to
06:46offer offer offer offer dilute dilute
06:49dilute dilute I've called for the
06:50resignation of the CEO over there Mr
06:52Adam Aaron many times and way before he
06:55even did half the offerings because I
06:57felt that he was going to offer it into
06:58the ground and that's exactly what
07:00happened sure GameStop has had some
07:02delution especially over the last couple
07:03of months but if you compare GameStop to
07:06AMC it's night and day AMC had about 24
07:09million shares outstanding in September
07:11of 2020 today it's got about 294 million
07:13shares outstanding gme in September 2020
07:16they had 260 million shares and today
07:18they have 426 million shares so sure
07:21GM's float has expanded substantially
07:23but nowhere near what AMC's has AMC
07:25shares outstanding 20x gme hasn't even
07:29doubled for those who say that endless
07:30offerings are good you got to remember
07:32folks that the whole point of a short
07:33squeeze is that there's a rush to buy
07:35shares of which you're in a very limited
07:37Supply you remove the limitation on
07:40Supply The Squeeze thesis gets destroyed
07:43if you are printing out shairs like
07:44toilet paper it becomes less and less
07:46valuable to have said toilet paper and
07:49so regardless of the two big offerings
07:51that we already had over the last couple
07:52of months with gme I'm hoping that Mr
07:54Ryan Cohen doesn't go the way of AMC and
07:56I think there's a solid chance that he
07:58doesn't so from a squeeze persp
07:59persective I believe there's a thesis
08:01there and there's a big possibility
08:03there how far that could go it's
08:04anybody's best guess there's a lot of
08:06human psychology there a lot of Market
08:08psychology there's some regulation there
08:10as to how Regulators react and so for me
08:12when you're looking at these different
08:13points there is a squeeze thesis it's
08:15hard to quantify but there is a squeeze
08:17thesis now what about a long-term
08:19investment where's the argument there is
08:20there an argument for a long-term
08:22investment well for me I don't
08:23personally like the video game retailer
08:25business but I do see a lot of pivot
08:27potential the massive amount of capit
08:29they have on their balance sheet some $4
08:31billion now provides a lot of
08:33opportunity to acquire businesses that
08:35can completely turn around the overall
08:37picture for the company the fact of the
08:38matter is that continuing with
08:39GameStop's current business model is a
08:42long-term failing proposition they need
08:44to use this Capital to Pivot and to
08:47expand their business model instead of
08:48doubling down on what is already not
08:50working under the current leadership
08:51over the last 3 years GameStop has seen
08:54a reduction in Gross margins total
08:56revenue has declined free cash flow has
08:58declined and again this is is comparing
08:59the last 3 years and they did some big
09:01offerings in the beginning of the 3
09:03years too so they haven't been very
09:04creative or effective at using that
09:06money in the past other than just kind
09:08of maintaining the ship sure Ryan Cohen
09:10wasn't very suggestive at the meeting
09:12earlier this week but but there's a lot
09:15of opportunity for him to look at this
09:16capital and think okay I can acquire my
09:19way to the next level by using its newly
09:21raised cash to acquire profitable
09:23companies GameStop can diversify its
09:24revenue streams and reduce dependence on
09:26its traditional business model for
09:28example they could acquire a company in
09:29the e-commerce space and that could
09:31provide GameStop with a robust online
09:33platform to compete with other giants
09:35like Amazon and others that have a
09:37broader range of products sure they
09:38already have something like that but
09:40it's not very good and the numbers
09:42aren't that good either so acquiring an
09:44e-commerce brand that is already winning
09:46well that would be very very effective
09:47for them GameStop could easily acquire
09:49other competing companies specializing
09:51in game development or digital content
09:52creation and bu owning Studios or
09:54platforms that produce popular games or
09:56gaming content while GameStop can tap
09:57into the pretty lucrative digital sales
09:59Market Market in a way that it's not
10:00right now GameStop could also invest in
10:02Esports the Esports industry is rapidly
10:04growing it attracts millions and
10:05millions of viewers and significant
10:07sponsorship deals be easy for GameStop
10:09to acquire Esports organizations
10:11tournament platforms or content
10:12streaming services related to that this
10:14move would position GameStop at the
10:16Forefront of gaming entertainment and
10:17could bring in a lot of mola and get
10:19lots of people excited there's also the
10:20opportunity to create some new
10:22subscription models there's lots of
10:23people millions of people that love
10:24GameStop it would be easy for them to
10:26introduce a new subscription model
10:28something 50 bucks a month they also
10:29could acquire some companies that have
10:31very very popular mobile games there's
10:33tons of companies out there that do
10:34maybe $5 to10 million a year in revenue
10:37and they could acquire them use some of
10:39their expertise to bring those companies
10:41to a broader audience and make them
10:43profitable this is just assuming that
10:44GameStop wants to stay in the gaming
10:46industry I think it would be better if
10:48they did a Burkshire Hathaway model
10:49where Berkshire was a failing textile
10:51company and they started buying up other
10:53companies that weren't even related well
10:55I think that GameStop could easily do
10:56that and really take the overall
10:58situation to the next level and make it
11:00so that GameStop is a company that stays
11:02around for not just a decade based on
11:04this money but based on the actual
11:06underlying business many many decades
11:08and that could really really destroy the
11:10short thesis GameStop could also invest
11:12heavily in virtual reality and augmented
11:14reality and revolutionize gaming through
11:16that obviously we're at the beginning of
11:17a big big shift into a metaverse world
11:21into the next generation of gaming and
11:22right now we're at the very beginning of
11:24it but maybe in 5 10 years that's going
11:25to be a much bigger deal so Investments
11:27that they could do in that could put
11:28them in the beginning of a much much
11:30bigger wave later on obviously I think
11:32there's a lot that GameStop can do with
11:34this cash besides just sit there and
11:36wait so anyways that's my thought
11:37process you can let me know what your
11:38thought process is down below let us
11:40know your overall take we'd love hearing
11:41from you anyways folks that caps off
11:42today's video make sure to hit that
11:44ravishing like button and subscribe and
11:45we will see you in the next one
