# Why the updated ATM offering is an absolute MASTERSTROKE and I'm more confident than ever that RC and Game Stop WANT the squeeze to happen!

| Author       | Source       | 
| :-------------: |:-------------:|
| [u/sped2500](https://www.reddit.com/user/sped2500/) | [Reddit](https://www.reddit.com/r/GME/comments/mkkb3w/why_the_updated_atm_offering_is_an_absolute/) | 

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What a weekend, what a wake up! I like everyone else woke up to some fancy price action and dug in to find out that Game Stop (remember, without the booted CFO) filed with the SEC to update their previous filing regarding their ATM offering. Important that it was UPDATED. Game Stop could have done a lot of things here, and they did something that IMHO will HELP the squeeze happen. I argued in my previous DD https://www.reddit.com/r/GME/comments/m4wq5t/why_rc_and_gamestop_want_us_to_win_this_fight_and/ that they wanted the squeeze and I'm more confident in ever that this is still the case.

A rundown on what an ATM offering is vs a traditional secondary offering and why it matters.

In a traditional Secondary stock offering a company announces that they will be selling more shares from the treasury into the market. They do this to raise cash plain and simple. When you buy stock, no money goes tot he company, only to the seller. Offering more shares is the way that the company makes itself the seller. Typically a secondary offering will take the form of "X million shares at Y dollars a piece"

Any offering of stock CAN reduce the share price in the short term (though it doesn't always) because it puts more shares into the overall market. The total value of the company is thus divided amongst more shares. The offering price in a traditional offering can often function as a leading indicator for the market about what kind of share price to pay because that is what the company is valuing those shares at. Price may drop (or even increase) depending on the offer price.

An ATM (At The Market) offering works differently. An ATM offering is where a company reserves the right to sell shares whenever they want, in any quantity they want, until a certain value or share count threshold is reached. The primary advantage is that it allows the company to better capitalize on the share price being high at any given moment, and can result in much lower dilution of the float. It also allows the company to have money on tap whenever they need it instead of having to push out a whole bunch of shares all at once.

Game Stop ALREADY had an ATM filing in place before today. They had the right to sell up to 3.5 million shares total until the total float was 300,000,000 but only until they sold $100 million worth. THEY DID NOT USE IT. This is critical. $100m divided by 6 million shares (roughly how many would have been needed to make $100m) means about $16-17 a share. Game Stop didn't think they were worth $17 a share. They changed their filing to allow them to sell the SAME 3.5 million shares (remember, UP to 3.5 million, they don't have to) a MAXIMUM of 3.5 million shares but to raise up to 1 BILLION DOLLARS. That means that Game Stop thinks their stock is worth AT A MINIMUM $285 a share. Once all the premarket nonsense and FUD is spent, real analysts and people who know a thing or two are going to realize that Game Stop just set their own short term price target. Anything less than that is going to be a bargain.

The 3.5 million shares on tap for an offering were already known! This was already factored into everyone's understanding and analysis regarding the squeeze! If the shorts needed a total of 3 million shares to cover this would worry me, however they need more, WAY MORE. I personally believe that they need 100m or more shares to begin to cover, 3.5m is a drop in the bucket and doesn't help them in any way.

Ok Ok, so that's the deal with the ATM offering, so how does this help the squeeze and why does it mean they want it?

1. They could have upped their offering to increase shares offered, they didn't. While upping the value of the shares offered means they are looking for more money (because of higher share price obviously) they could also have upped the number of shares they wanted to sell or thought they would need to sell to do it. They didn't, they kept it the same. They know the math regarding the shorts and what they need better than anyone. They could have offered enough shares in one fell swoop to end all of this and make us all sad, they didn't.

2. They set a real world expectation that their shares are worth at a MINIMUM $285 a piece. Their offering makes it mathematically stupid for them to issue even a single share until the share price is greater than $285. The higher it goes, the fewer shares they need to offer. Getting us a new floor up around $285 is amazing and will give confidence to retail investors wondering "gee, are these really worth $200 a share?"

3. They (imho) have completely eliminated any concerns of major dilution. Their previous filing with the SEC noted that they don't have any plans to significantly change their share offerings (and they haven't, just updated the old one) and that they have plenty of cash on hand and no debt issues. I think these 3.5m shares (when they sell) are going to be the last that we see for a while. The lurking fear that they might just pull a move like some other companies and double the float overnight is gone.

4. This might very well be the catalyst that starts the squeeze. If people know that the company is rock solid set on $285 a share and accept that as a new support price, the wave of buying up to that point this generates could be the additional buying pressure needed to put the final nail in the coffin.

Lastly if I can get silly and pull my tinfoil hat too tight for a moment, the recent tweets have been signaling that last week was the spring sale which would end yesterday. If shares were trading under $200 and Game Stop knows that they are going to be setting a new target of $285 (come this morning) then last weeks $191 closing was indeed a sale price!

As I argued before, I think RC and the new leadership have a plan to help shepherd along the squeeze because it will create the **WEALTHIEST, MOST LOYAL FAN BASE OF ANY RETAILER IN HISTORY**. Today's updated filing does nothing but strengthen my belief that that is true.

TLDR: Game Stop just telegraphed that at some point in the near future they will have a billion in cash to play with, and they are going to do so without putting the squeeze in jeopardy or meaningfully diluting our share price. Game Stop thinks these shares are worth MORE THAN $285/share minimum.

Edit: Changed to correct to (At the Market) rather than at the money as pointed out by a friendly commenter. added TLDR

Edit 2: As has been pointed out in the comments by several helpful commenters I was wrong in my post about the previous offering and have made the facts clearer in the post. This info actually makes this updated offering MUCH MORE BULLISH. Previously, the offering could have resulted in tens of millions of shares offered to make a fraction of the money for the company. The specter of potential dilution was factored into the share price and holding it back. The changes in the current offering all but eliminate that fear COMPLETELY.
