🚨 Carl Hagberg AMA Transcript/Summary (2/2) 🚨
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|  [u/Bye_Triangle](https://www.reddit.com/user/Bye_Triangle/) | [Reddit](https://www.reddit.com/r/Superstonk/comments/nceapj/carl_hagberg_ama_transcriptsummary_22/) | 

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[Education 👨‍🏫 | Data 🔢](https://www.reddit.com/r/Superstonk/search?q=flair_name%3A%22Education%20%F0%9F%91%A8%E2%80%8D%F0%9F%8F%AB%20%7C%20Data%20%F0%9F%94%A2%22&restrict_sr=1)

This is Part 2, See comments for [Part 1](https://www.reddit.com/r/Superstonk/comments/nce9kq/carl_hagberg_ama_transcriptsummary_12/)

_____________________________________________________________________

WHOSE VOTE IS IT ANYWAY

-   Carl

    -   let's just say, both the lender and the buyer end up having voting rights, right. And so there are a couple of problems. One is, no one knows this, most of the time unless their custodial bank or broker goes to vote over 100% And most of the time, no one ever goes over 100 in a good year 70% Of all the shares. Maybe 80% will be voted 20% will never get voted, so unless you go over that 100% number at a particular bank or a particular broker, no one is ever the wiser. Okay, then more of these votes have been cast.

    -   There was a famous incident that was one of the most contested mergers of all times, it was the HP Compaq thing,

    -   and institutional investors who were dead set against this merger they thought it was a horrible deal, which I believe turned out to be discussed discovered that because they had lent their shares their vote didn't count in, and in fact, the people who borrow the shares their vote carried the day.

    -   And so it wasn't economically right it wasn't morally right, But that's what was happening. Okay. And then, so sometimes, of course, they have to somehow come up with the right numbers. And so they go back to the banks and brokers and say well look you voted a million and you only have 500,000 Please set up straight. And so this reconciliation takes place in a dark room somewhere. No one ever explains how they did it, and they're not obliged to explain, but somehow, in the end, it comes right.

TL:DR 🦍 Summary:

-   Carl explains that it is very rare that votes ever exceed 100%, so often the issue of short/naked short selling rarely comes up. Wonder what happens when it does?

-   Carl then explains a famous merger happened on the basis that those who lent their shares became unable to vote on the basis they lent their shares and in fact, *those they lent succeeded in making a horrible deal***.**

-   Carl then goes on to explain somehow, when this does happen, it gets 'straightened out' and no one understands how.

_____________________________________________________________________________________________________

MONSTER MONEY

-   Ato

    -   So we've got about 10 minutes. I'm loving the information that you're throwing out but I do want to tie some of this into some of the things that we're talking about here. I know I can sit here and I can listen to what you're saying, all day,

    -   Finding that common ground where we understand that this position this is happening right you're explaining it this is happening and how we're leading it to today where you and I both talked on the phone last week talking about that current position in Gamestop and having, you know 140% flow versus being mathematically impossible to kind of escape that

-   Carl

    -   Exactly right and that the reconciliation takes place unbeknownst or unscrutinized by any regulatory authority or anybody at all.

    -   And then comes the last part, and this should be close to the heart of Gamestop owners, and that is that institutional investors, by the way, big pension funds or big mutual funds, make monster money, enormous amounts of money by lending shares to the people who want to sell short.

    -   So, let's say I have a brokerage account, if I have signed a margin agreement-- I signed to allow my account to be a margin account. They can lend my shares to anybody, make money, unbeknownst to me, I lose my vote because the disclosure is really very, very poor. I hear that some Gamestop owners have been finding... *Where's my proxy?! Where's my annual report?!*

    -   Now, they got canceled out. because they happen to have a margin account. *Regardless* of the fact that they may not have had a penny in margin loans, but they had signed an agreement that allows the bank or broker to vote and to lend their shares.

    -   They don't even get a penny of compensation. So, the agent is making millions and millions of dollars, individual investors who are in the dark about this, they're not even discovering it. Most times you don't know you didn't get a vote.

    -   Now with Gamestop because the imbalance is so big, people are asking *where's my vote* and if you have a margin account you often don't get a vote, or, no, *you missed the day you missed the magic day you don't get a vote.* And so that is one of the worst,

    -   Now I have my very last of the worst. And I was very happy to see that the interim SEC chair woman, Alison Heron Lee

    -   She was the interim Chair, and she's still an SEC Commissioner. While Gensler hadn't been confirmed yet, the instructed staff to look into mutual fund voting because mutual funds are often like non-voting, or they're giving the vote to somebody who's voting against their very own positions. And mutual funds, many of them, are deciding that shareholder votes do indeed have value.

    -   Whether they're economic proposals or social proposals or environmental proposals, your vote on these proposals has a value of its own.

    -   *And* companies that are good citizens, create more value than companies who are scoundrels. So now, Alison Herron Lee, God bless her, she said,

        -   *We need to study, we need greater disclosure as to what mutual funds are doing with their shares, are they lending them to third parties who are voting, in many cases against the positions that they uphold?*

TL:DR 🦍 Summary:

-   Carl explains that the game for institutions and mutual funds is to make millions by lending shares out any which way you can, including allowing retail investors to enter agreements to allow them to do so without providing much obvious notice.

-   Carl

    -   By the way, these mutual funds are fiduciaries, as I was back in my days as a banker, and our duty is to our clients, to the shareholders. Okay, and not to the almighty dollar. Those are the issues that I think are in front of us now.

    -   I'm really pleased to see so many Gamestop owners are stepping up and asking hard questions,

    -   And I'm sure that, based on the numbers I've been hearing, that come to their meeting, there's going to be significant, over-voting.

    -   That is unless people spend hours and hours ahead of time in their dark, back offices trying to reconcile this before the day of the meeting. /s

-   Ato

    -   I mean... wow... okay, so I have, I have a lot there I want to address with you.

TL:DR 🦍 Summary:

-   Carl explains that the game for institutions and mutual funds is to make millions by lending shares out any which way you can. Including, allowing retail investors to enter agreements without being super to allow them to do so without providing much in the way of *obvious* notice.

_____________________________________________________________________________________________________

MATHEMATICAL IMPOSSIBILITIES

-   Ato

    -   One of the biggest things, I think, are the numbers that you were talking about they're the things that are evidence of naked short selling.

    -   Dr.T was mentioning in her AMA, one of these places that you can kind of see the evidence of naked short selling, bubble up is in the shareholder meeting.

    -   Which you've talked about, I mean, obviously this is a pervasive issue.

    -   I'd like to kind of start walking through some of those numbers that we sent to you for review and then talk about some of the effects of this upcoming vote and the significance of *potentially* being the first company in a very long time (if not ever) to have this vote where you're seeing, potentially hundreds of percentages above what was possible.

    -   On that note, because we have about eight minutes Are you okay going a little bit over?

-   Carl

    -   Yeah, that's fine!

-   Ato

    -   Okay, good. Thanks, I appreciate everything that you just talked about, I really do. I don't want to have to cut off the rest of this.

    -   I have people who are wanting to know-- institutional shareholders, international shareholders... we've got questions. for them people that are having issues finding their control numbers, for example.

    -   I know Dr. T was stressing the issue, the importance of that for being able to get their voice out. So yeah, if you don't mind, that would be great if we could take a few extra minutes.

    -   So let's do that!

    -   You point out in your 2019 comment letter to the SEC, where you're talking about these huge implications and how pervasive this issue is, and one thing that stands out to me was this concept of over-voting.

    -   What you just described. Not just through *naked* short selling, but through short selling, and so that has kind of led up to this position where we're at today.

    -   we have the run-up 2019 along with the narrative people are able to spin through media, like you talked about-- *that GameStop is the next blockbuster,* so to speak

    -   so there was this huge downward pressure on GameStop for years, and even in 2019 this was a heavily shorted stock, and a lot of people caught on to that.

    -   And so the run-up in the beginning of 2021, when we got into January, was where we started to see this tremendous share volume coming out. The biggest red flag, I think, for most people in this subreddit, was the total reported shares outstanding.

    -   At the end of 2020, including restricted shares, (those internal shares that are being held by insiders) was about 69 million shares.

    -   And so when we see a period of 17 days, from January 13th through the 5th of February, where average daily trading volume is 88 million, and the peak during that was 197 million, totaling 1.5 billion shares exchanged over 17 days. Does that not scream naked short selling to you?

-   Carl

    -   Oh, absolutely. It's mathematically impossible for this to happen, except for the fact that it's not just the "Naked" part that is important to focus on... it's important to focus on short selling, itself. When you allow people to keep reselling these imaginary shares to make these loans, y'know?

    -   If I lend you a shovel, you've got my shovel, but I lend you stock, you don't just have my stock, you have a voting right. And you get a credit somewhere, but you don't really have my stock, you know what I mean?

    -   So, in other words, it's mathematically impossible to have trading volumes like this.

    -   what it's done, it's pumped in this infinite supply of shares that can get bought by somebody, you know, albeit at lower prices, so yes, this is a problem in itself. There's no way around it, it's not a mystery. Okay, the numbers are clear, they are what they are.

    -   So I think the real thing will be, what happens when the meeting convenes? And... *It could be* that people are feverishly working in their backrooms, to try to cook the books.

    -   Trying to deprive enough people of voting their shares that you won't see them anymore. So... that could be one thing...

    -   So we'll see what happens when the Annual Meeting convenes.

    -   If there aren't more votes present than there are shares, I'll eat my hat.

    -   It's almost impossible to fix this, even in the darkest of dark back rooms. So that's, that's probably problem number one. The other thing I would say, as I, as I alluded to this is getting, thanks to retail investors, it's getting attention.

TL:DR 🦍 Summary:

-   The vote count is the missing piece of this puzzle as of now.

-   Carl essentially confirms that it seems mathematically impossible that the shorts have covered.

-   He goes on to stress how difficult it would be for the bad actors in this situation, to reconcile the votes prior to the meeting.\
    _____________________________________________________________________________________________________

WE NEED A GOOD PLUMBER

-   Carl

    -   So there have been some hearings. I was really happy with what Allison Lee did, and I'm very encouraged by Gary Gensler, he is a man with tremendous integrity, not to say that our former commissioners didn't have integrity, but Gensler gets it. He's got a mathematical mind, he understands systems.

    -   For all these 40 years that I've been writing about this, people have kept their heads in the sand and they've been willfully blind or willfully unwilling to dig into what they call *proxy plumbing.*

    -   I always thought plumbing is a good thing, but for 40 years, plumbing for us has been a bad thing. It hasn't been so good. It's had a lot of "smelly overflows", so to speak. So, I do think that there's some momentum, now, at the FCC, and from the public, and even in Congress a little bit.

    -   And so hopefully we'll see some progress made on this.

-   Ato

    -   I know that you were talking about Gensler pushing for a lot of this reformation back in 2008 as well, so he's been championing this cause for quite some time.

    -   That encouraged me when I heard him in that committee meeting, just recently. It seemed like he was nailing these on the head, and the difference between what we've had, versus what we need... is that action.

-   Carl

    -   Yeah.

-   Ato

    -   And so, it's getting to where this community is growing so big, that we are just a handshake away from Gary Gensler. I mean we have the data we have the numbers, this is what the people are wanting, are these answers.

    -   We're putting forth the evidence that this is happening, we have the experts like you, and Dr. T, that are in the field and Wes Christian.

    -   So, I'm glad to see that you're excited about it because I really do think that this is the time for change.

-   Carl

    -   Right! Let's hope so. As I say, it's time, we need a good plumber, we never had a good plumber.

[![r/Superstonk - 🚨 Carl Hagberg AMA Transcript/Summary (2/2) 🚨](https://preview.redd.it/2364vij5g4z61.jpg?width=820&format=pjpg&auto=webp&s=04d2da4df98a22e00ce75e35e84c40def7983832)](https://preview.redd.it/2364vij5g4z61.jpg?width=820&format=pjpg&auto=webp&s=04d2da4df98a22e00ce75e35e84c40def7983832)

Thanks for this u/pinkcatsonacid

-   Carl

    -   Most of our regulators, in my opinion, they are the regulated, they're made up of the very people who are being regulated, the ones who are making billions of dollars in these deals.

    -   You can imagine, I tried to explain to them... They shut their ears. they're willfully deaf, dumb, and blind to all this. So we need somebody who says,

        -   *I think this problem has become big enough that you can't ignore it, let's talk about the elephant in the room. You can't ignore this elephant anymore*

    -   The SEC knew this was wrong in 2009 when the inspector general told them, but they did nothing about it... fortunately, for them, markets got a little quiet and that went away, but then it comes back, and that's the way it will be.

    -   So in any event... So, I had asked you, make sure that I get my point across, which is; *how do we solve this*. We need to figure out how to solve this.

    -   The first thing is, there needs to be a pre-reconciliation. People should never get a proxy unless they are holders in due course, and people who are not, should not be getting proxy materials. But it needs to be a valid-- legitimate reconciliation, and that's very hard to do.

    -   when you sell the same *banana* 158 billion times, and you only have 72 million bananas... reconciling This is not an easy thing to do.

-   Ato

    -   Bananas.. Hahaha

-   Carl

    -   So in order to really solve anything... It's sort of after the fact, you know, you clean up you throw something over it

    -   The next thing though that can and should be done is to force lenders to recall their shares before the Annual Meeting record date comes along.

    -   That's where the mutual funds and the big pension funds come in... They really do have a fiduciary duty to recall their shares so they can vote on it themselves. There are no two ways about that.

    -   So, that would help, big time. Although again, the numbers are so big, it's like *hmmm, I got to start a year in advance* *to get my shares back*.

    -   The other thing is, I feel that brokers should be prohibited from lending shares that belong to individual investors, without better disclosure. Full disclosure would be,

        -   *oh I can lend your shares and I can make a lot of money doing it anytime I want. And by the way, I owe you nothing, and you can't protest.*

    -   This is not ethical-- it's not correct. People need to be told no, you cannot be doing this.

    -   Maybe, if somebody is stupid enough to say,

        -   *yes, okay I'll let you do this, take my shares, take my votes, take the money and give me none...*

    -   ... Well, God bless.

    -   but, if you make decent disclosure mandatory, I don't think this will be lasting very long. But, bear in mind this is a multi billion dollar source of revenue to banks and brokers and custodians and middlemen... and to the mutual funds themselves.

    -   Okay, so the next thing, and Dr. T said this as well, and I think this is what's going to happen in the Eurozone.

        -   That is to say, *we'll give you up to five days. You're supposed to settle your debts, settle your accounts where the debits and credits end up equal within two days of the trade.*

        -   *well all right we'll cut a little slack but within five days of the trade. If there was short interest, it needs to be bought in period, so that the debits equal the credits, and the votes equal shares outstanding.*

    -   That's the only real solution... otherwise, people will continue the game for another 60 years.

    -   So... Maybe I am looking at the world through rose-colored glasses... but people like Gamestop holders should keep on doing what they're doing, realize that votes have value.

    -   They had real value. This was a stock that was fast going down to tubes until they said,

        -   *No, I don't believe all these things and I don't think this is a company that is going down or should be going down the tubes,*

    -   But, they need to raise their voices, they need to speak up to the regulators. And, They absolutely need, especially this year, to try to cast their votes. and when they don't cast their votes, ask their intermediary, and then publish the crazy stories that they get back as to why they're not entitled to vote.

    -   They paid their money and they're on the books as stockholders. Why did they not get their vote? And if you keep going like that. I think we will force a solution

TL:DR 🦍 Summary:

-   Carl states he is hopeful that we will see change with Gary Gensler taking the lead. Going on to say we need a so-called "Plumber" for this system, someone to do some real work on this messy system.

-   Carl touches on a similar topic to what Dr.T was talking about, with regards to legislation being worked on in the "Eurozone" that could really bring forth material change.

-   Voting and being outspoken is the best way to force a solution here, and if you cannot vote, find out why from your broker, because as a shareholder, who has entrusted your money with this company, IT IS YOUR RIGHT. _____________________________________________________________________________________________________

FOREIGN VOTING

-   Ato

    -   Can I ask one more question?

-   Carl

    -   Of course!

-   Ato

    -   So, several foreign investors, non-US investors, are holding potentially millions of shares here. They're receiving excuses from their brokers like you were saying,

        -   *you just have no involvement,* or *we don't have the voting rights for you.*

    -   So how can they go about this? Is there something where they can tell their brokers, *I know I have voting rights* and fight this? or how can we help them?

-   Carl

    -   This is a very difficult thing to do. Historically, foreign investors never really voted their shares. Individual shareholder ownership was almost unheard of in a lot of Europe, you know unless they were an oligarch, a multi Millionaire, or Billionaire, It wasn't something that the average person was doing.

    -   Even when they did, they're typically getting their proxy materials in English... I got emails from people in Swedish and my Swedish isn't good enough to read it anymore and so... there is also the language barrier to consider. So there's a problem facing foreign investors.

    -   I say they need to go public. They need to get an answer from their broker or their financial intermediary in writing,

    -   But, this is actually much harder, to be honest with you, than it would be for US citizens. What we barely understand here, over there, they just don't understand it. You know it's just not something that's percolated down, to where you can even have a conversation with somebody.

-   Ato

    -   I am seeing, and I think a lot of people on the subreddit are seeing this. Things are starting to change. We have posts on Reddit being translated into German, (Editor's note: More than just German) it's definitely a transition. I think we're at a point where we are seeing that involvement.

    -   The sense of comfort, I've had with it, up to this point is, to treat everything equally. So if we had a percentage of people that were domestic that were voting, we still had a percentage, back then, that people that were non-domestic that weren't voting.

    -   So, as the pie on the left has grown the pie on the right has grown, we should still see a prevalent issue with the domestic vote. The ability for these people overseas to be able to go public with that will help, I think it's essential.

TL:DR 🦍 Summary:

-   This is one of the more difficult matters to address, solely due to the fact that foreign investors usually don't vote, or don't care to vote in corporate elections across the pond.

-   Despite the difficulties, remember, VOTING IS YOUR RIGHT. If you are investing your hard-earned money in a company, you're damn right you deserve a vote.

-   If you are a Euro-Ape and your broker is being sketchy about letting you vote, you must do everything you can to speak up and speak out.

_____________________________________________________________________________________________________

ADVICE FOR GAMESTOP

-   Carl

    -   You know you made a very, very good point here, that we didn't focus on enough. I want to say two things and then I'm going to quit.

        -   One is, if you own shares, you're the owner, you have rights. You need to assert them, and failure to do that is really, you're not doing right by yourself.

        -   The second thing, and you've just touched on this, the power of social media. I've been writing these letters and they're all posted on the SEC website and nobody's ever reading them and no one's ever responding to them, but social media doesn't go away, it can only grow. I think I was to be optimistic. That would be the source of my optimism.

    -   When you say *oh, we're putting the proxy statements in German, or whatever* so people can read them. These are revolutionary developments. So I end up feeling optimistic at the end of the day.

-   Ato

    -   Thank you for that response Carl

    -   If you don't mind, I have one final question for you, and I appreciate you going over time.

    -   I'm just blown away by your experience. I know people on this sub, we have so many people, turning out to ask you questions continuously. You'll probably still have referrals for answering questions even after this, I would fully expect that.

    -   But, anyway, for the executives at GameStop that may be watching, what are some actions that they can take that are the best fit for them in terms of protecting investor rights and shareholder rights? If and when they start to see this blown-up issue of over-voting occur, what are some of the best things they can do to put the boot down?

-   Carl

    -   What they need to do is pay attention. They need to pay careful attention to the voting reports that come in.

    -   The first thing I'd looked at when I heard about this was, *who was the lucky company that was going to be the proxy tabulator.* I was afraid that it was somebody in, you know, out of Mongolia who was going to be counting these votes but they have a very good tabulator, and a lot of these votes are going through well-automated systems.

    -   They also need to hire a good inspector. I'm sure they have, but they need to have a good inspector of election who won't be fooled. An inspector who will work like a *demon* to make sure that the reconciliation is appropriate. Except... piercing that veil is really still next to impossible to do.

    -   So, I would say the management, pay attention to the election. Respect your stockholders, read the mail and emails from people who feel they've been disenfranchised, and hopefully, they'll realize that yes, many people are being disenfranchised...

    -   and who are they? They're their best customers, you know, their best friends.

    -   So, that's an injustice in itself. That we're letting hedge fund managers, speculators, and gamblers, run away with our electoral system, at the expense of our customers and our boosters that the people who keep us alive as a company, so I say, they gotta toughen up

-   Ato

    -   I got one final question for you, sorry, hold you up for a minute.

    -   I know you and I talked about this, shorts covering. The can, perpetually getting kicked down the road but, long story short, shorts have to cover?

-   Carl

    -   Not really, some of them never covered because there wasn't a market, the stock got delisted, going under a dollar... and so they never covered, *they just walked away... laughing.*

    -   So no, unfortunately.

    -   And that's probably a good place to end. This is what happens if you don't have a well-regulated system. You get a bunch of criminals, pushing down the price of a stock, until it goes to zero, and laughing all the way to the bank.

    -   So, the evil-doers go away with money and the loyal stockholders, get ripped off.

    -   Unfortunately, I think a lot of stockholders were frightened out of the market and sold their shares at a loss so what has been the gain, have they held on. So, this is really a classic example of how unjust and how untenable, these practices are.

-   Ato

    -   Well, I am optimistic about the number of people that have held and have continued holding, even with the pressure that's being put on them today. So, we'll see what happens with this voter turnout, but I really do think that it's going to be a crucial point and the most consequential event that we've had so far.

-   Carl

    -   Well, do stay in touch. If you have questions, send them to me and I will try my best to answer them. I hope I did pretty good.

    -   It's cocktail time, here in sunny Florida. So, goodbye everyone. Thank you so much!

TL:DR 🦍 Summary:

-   Carl's advice to the heads at GameStop:

    -   PAY VERY CLOSE ATTENTION TO THE VOTE REPORTS

    -   Read the Mail and Email from the stockholders, pay attention to those that feel disenfranchised

    -   Hire an especially diligent inspector of elections

    -   "TOUGHEN UP"

-   In past circumstances, predatory short sellers have gotten away with this game-- pushing the stock price to the point of being delisted so they don't have to ever reconcile their massive dump of phantom shares.

    -   There was confusion over the last section of the interview when Carl stated that shorts don't HAVE to cover, I believe if you take this statement in context with the rest of the AMA, he is clearly referring to shorts having to cover, generally. Carl already states multiple times in the AMA that he is very optimistic about this GameStop situation. Anyone trying to twist this narrative is acting in bad faith

_____________________________________________________________________________________________________

That was incredible, Thank you so much Carl Hagberg, your input on these matters was incredibly eye-opening and reassuring.

I believe I can speak for the Apes when I say, that we are proud to have been the ones to which the torch has been passed so to speak. Continuing to fight for the change that Susanne and Carl have been pushing for for decades.\
Apes, if there is anything to take from this, it should be this:\
VOTE YOUR SHARES and if you cannot vote, for one reason or another, then YOU MUST SPEAK-UP.

[![r/Superstonk - 🚨 Carl Hagberg AMA Transcript/Summary (2/2) 🚨](https://preview.redd.it/j5uprrmbg4z61.jpg?width=1000&format=pjpg&auto=webp&s=43dcdd15bfe04bd9595799b60b7d0dcf6554b772)](https://preview.redd.it/j5uprrmbg4z61.jpg?width=1000&format=pjpg&auto=webp&s=43dcdd15bfe04bd9595799b60b7d0dcf6554b772)

_____________________________________________________________________________________________________

One final reminder, do not miss the AMA with Lucy Komisar TODAY, May 14, 4:30PM EDT. As I said at the beginning of this, unfortunately, there will not be a formal AMA transcript/summary like this for that AMA. The amount of work that it takes to pull these together, with this level of quality, is way larger than you think-- as a result, I thought it best to keep it to one of these a week as to not burn out our team trying to crank these out under strict time constraints.

That being said, if you are at the end, you clearly find some value in these posts... So if you as one of those Apes that find this invaluable, you can let me know. If there is enough desire, I can post the rough copy transcript, so at least the Apes that need the AMA's in this format (the deaf community, those with ADHD, etc), can still have it in writing, though without the formatting, editing and summaries. Next week there will be one of these for our AMA though, don't worry.

Finally, One huge thank you for the support that myself, [u/Luridess](https://www.reddit.com/u/Luridess/)**,** [u/Leaglese](https://www.reddit.com/u/Leaglese/)**, and** [u/Cuttingwater_](https://www.reddit.com/u/Cuttingwater_/) have received on these posts, it is what keeps us going!

Cheers,

B_T
