Welcome back to channel everyone today i want to talk about gamestop's stock split. I want to talk about how this could impact amc and how this could cause a share recall which will cause the mother of all short squeezes in all meme stocks, so stay tuned and let's make some money now. I think there's tons and tons to unpack here. Gamestop have just announced a stock split and a dividend.

The stock split could cause a share recall, which means the shorts would have to buy back the shares, they've shorted and return them, which would obviously cause those shorts to be liquidated and cause the moass. So now i want to dive straight in with the key information. So unusual whales, just tweeted, saying breaking news, gamestop split confirmed in their 8k report via a dividend in gamestop's recent ak. Under the other events heading.

It says that gamestop has just requested an increase in the number of authorized shares of class, a common stock from 300 million shares to a billion shares. It says in order to implement that stock split of the company's class, a common stock in the form of a stock dividend and provide flexibility for future corporate needs. This means that keemstar aren't doing a share issue and just issuing another 700 million shares on top of their existing 300 million shares. It means they're doing a stock split, which involves recalling the 300 million shares and issuing a billion brand new shares.

The definition of a stock split per my accounting course is a stock split. Also called a forward. Stock split occurs when a corporation recalls its outstanding shares and issues more than one share for each previously outstanding share. Now i don't know the exact fine details here, because it doesn't say that they're, recalling their 300 million class a shares and issuing a billion new class b shares.

I think what they're actually doing is just splitting their class a shares through a dividend and therefore not necessarily replacing one kind of share with another kind of share, therefore, basically mean that you don't have to return. All of the shares that you currently hold on your trading platform or whether you've drs the shares but gamestop are just going to issue more shares on top of that during the split now. Those additionally issued shares don't go up for sale. They get given directly to you in your trading account or on your computer share platform.

Now, obviously, this is going to impact amc, because, if gamestop squeezes, then amc will also squeeze as well. In addition, i think a number of people are now getting in contact with adam aaron to see if adam can perform a reverse split, so adam, wouldn't necessarily split the amc stock and turn the 513 million shares into a billion or 2 billion shares. He could actually decrease the number of shares, an issue from 513 million back down to say 100 million shares, for example. Now again, i think we've got a lot to unpack here.

We've got a dividend: we've got a potential share, recall and a potential share recount. On top of that, so i want to break them down one by one falcon tweeted saying: oh okay: apes caught a dub today, gamestop just announced a stock split along with a dividend. Why? Let's discuss - and he says so: gamestop and pet food, connoisseur ryan cohen, probably had a large say in this, but gamestop just announced a 3.3 for one stock split along with offering a to be decided dividend why to be decided, we'll cover that in a second now. Obviously, gamestop didn't announce exactly how much they're going to pay for the dividend, whether it's 50 cents per share, 10 cents per share, a dollar per share, or some kind of other form of dividend like an nft dividend, and he says so.

So what is a dividend? A dividend is paid out each quarter or every half year or once a year and is usually a set ratio of the stock price that is paid out to investors in the form of additional shares warrants or just straight up cash in your accounts now again right Here in 2022, we have other forms of dividends as well like an sto or a security token offering or an nft dividend, which would be the gifting of an nft to you, the shareholder, and he says dividends - are a reward but shareholders continuing to hold the stock, Which is obviously good for the huddle movement, as people will continue, holding their gamestop and amc shares for the promise of a dividend, and i think mike m, very importantly, suggests who pays the dividend on a naked share. Here we go, ladies and gentlemen. Obviously, during gamestop's dividend they are only going to pay dividends on their currently existing 300 million shares. Obviously, gamestop aren't going to pay dividend on those synthetic shares that have been created by the market makers and sold to unsuspecting retail investors and potentially other institutions like you, and i, and obviously that means that market makers like citadel, are going to have to cough up A dividend on every single synthetic share that they've issued, which obviously right now could be in the realm of billions of synthetic shares.

Right now, gamestop has around two billion dollars in liquid cash. Two billion dollars, divided by 300 million shares, is a potential dividend of up to six dollars per share. Six dollars per share multiplied by two billion synthetic shares, which is a potential estimate on the number of synthetic shares, is a total dividend that citadel would have to pay to gamestop shareholders of over 13 billion dollars. But now the really interesting part here is: if ryan cohen, issues a dividend in the form of shares.

Let's say: ryan cohen doesn't issue a one dollar per one share dividend. He issues a dividend of three shares for one share, guys if you didn't already know, mumu and future have just officially announced that future does not accept payment for order flow, and therefore you don't have to worry about your shares, going through sketchy, dark pools or being Given to citadel right now, you can currently get five free stocks, valued up to 3 500 each when you sign up to mumu using the link in the description below and make your first deposit murmu also won the award for best trading platform at the fintech breakthrough. Awards moomoo is also entirely commission. Free has tons of technical indicators and advanced charting tools, moomi publishes daily short selling data position, cost distribution and much much more mumu is also incredibly easy to use and is very, very customizable and will help you to trade.

Like a pro so guys be sure to sign up to moomoo, using the link in the description below to get up to seventeen thousand five hundred dollars in three shares, and obviously this would be part of the actual stock split. If you're, currently holding one share in gamestop ryan cohen, will gift you an additional three shares as part of the dividend, but in terms of how that impacts, naked shares or synthetic shares. Obviously, these market makers would have to go into the market and buy three shares for every single one. Synthetic share that they've issued now.

Obviously, that's not actually going to be possible because it mean that citadel have to go into the market and potentially buy six billion shares for gamestop and give those to investors that are holding the synthetic shares as a gift. But obviously ryan cohen is only issuing 700 million shares and those shares are gon na go to current gamestop shareholders and therefore, basically, the market makers can't gift they share as a dividend to synthetic shareholders. Long story short basically mean those market makers have to cover their synthetic shorts before the dividend is issued now. Obviously, these market makers can't issue a cash dividend.

If ryan cohen has announced a share dividend, basically, meaning these market makers will have to cover their synthetic shorts and delete the shares they created. Obviously, these market makers covering those synthetic shorts and deleting those shares would cause the short squeeze and they would end up being liquidated and obviously, on top of that, if gamestop does recall their shares and issue those new shares instead again, that will also cause the short Squeeze because those massive lenders like blackrock and vanguard will be forced to recall all of their lent out shares. Obviously, if blackrock and vanguard and all those etfs recall those shortage shares, it means those shorts have to cover their short positions and return the share and again obviously, for those shorts to cover their short positions. They have to buy gamestop shares in the open market and return them now again.

This also impacts amc, because, if gamestop squeezes, then amc will likely also squeeze as well and on top of that, there's nothing that prevents adam aaron from issuing the exact same dividend that gamestop are issuing right now. Obviously, amc does currently have negative cash reserves and obviously a lost reserve, but it won't be long until amc is in a profitable position and will be able to pay those dividends as well. Now i think this expert, drawing from trey's trades, really depicts exactly how ryan cohen is feeling right. Now now you may have already seen some negative mainstream media response, such as a response from jim cramer.

He said gamestop with a split. Can you imagine how high the stock would actually go if they had a strategy? Obviously, do you think that ryan cohen absolutely does have a strategy? Mainstream media, like jim cramer, is just trying to discredit him, but, as stonk's batman says, he's trying to prevent fomo. Obviously, jim cramer doesn't want amc and gamestop to squeeze because otherwise it will liquidate him and all of his hedge fund buddies. The sec were also trying to prevent fomo as well and stunk's.

Batman says it makes sense now now, obviously fomo and gamma. Squeezing is exactly what we need for gamestop and amc to have their next leg up and continue their run and potentially cause the squeeze now. I also want to talk about exactly what happens when these shorts cover and end up being liquidated during the squeeze joel says: shorts can't afford to cover all of the synthetics for gamestop. It's a doomsday scenario for them.

You can't short amc if you're bankrupt as well, and he says if one meme squeezes then muln bbig, hymc and likely two or three or four of them also end up squeezing as well. He said, obviously there's not enough cash on the planet to pay for all of these shortage shares if they end up squeezing to thousands and thousands of dollars per share. Now here we have a very crude drawing of some scales. Obviously, at the moment, these scales are showing the hedges margin or their account value is currently positive.

Now, obviously, we know that citadel has or had around 234 billion dollars worth of assets, but obviously that is the face value of these assets or their cost price, and these assets may no longer be worth that amount of money. Obviously, in that 234 billion dollar position, they have some stocks like tesla, google apple, maybe microsoft and many others that they've been holding for a long period of time and they probably have a lot of unrealized gains on those stocks. But what they also have is a ton and ton of synthetic shares and naked short positions and legitimate positions as well on gamestop and amc, which is obviously dragging their portfolio value down after gamestop at amc, ran up so much. Obviously, the value of their total short position decreased significantly, but at the moment their total account value is still in the green.

Let's say you started by shorting amc with ten thousand dollars. You have a cost price of ten thousand dollars for your amc, short position, but after the january and june run ups. Maybe your ten thousand dollar short position is now only worth around. A thousand dollars, obviously, would have had to average up during that short position and potentially add additional cash and additional margin to that short position to ensure that it didn't end up going negative and end up being liquidated, but obviously, for example, at the moment, these hedges Do currently have a positive account value, however, it is close to being a net nil value, as they are only just surviving.

Obviously, as these scales move downward and their account value ends up hitting zero, they end up being liquidated as the value of their assets. No longer outweighs the value of their liabilities now, obviously, when their account value reaches zero and they end up being liquidated, a third-party firm of accountants will be employed to ensure that all of their long positions are sold off and all of their short positions are covered. As well now, obviously, at that very moment where their account value reaches zero, they will be forced to cover their shorts, maybe their account value reaches zero when amc hits two hundred dollars per share. Obviously it's going to be different for every single hedge fund out there.

Some will be liquidated at 40, some at 60 summer 80, some 100, some at 200 and some maybe even higher. But obviously, at that point, when they get liquidated, they will be forced to cover all of their short positions and there's basically going to be a market order. That's placed to buy enough shares to cover off their short position now. I guess it all really depends whether us, the amc apes want to sell our shares at that value that they end up being liquidated at.

Obviously, if they place a market, buy order and their market buy order isn't entirely filled because the apes don't want to sell their shares at that price. They technically won't have enough money on their own to continue. Buying amc shares. Remember they get liquidated as soon as their account value hits that 0.00 mark and therefore they can only afford to buy and cover their position at exactly that amc price without the price running up.

Obviously, if citadel places a billion share buy order for amc, it is not going to be entirely filled at one specific price point, because many apes don't want to sell their shares for a hundred or two hundred dollars per share. Now. Obviously, at that point, that is exactly when the dtcc need to get involved, because, obviously, if citadel end up defaulting, all of the remaining members in the dtcc are responsible for citadels there, and that is exactly when the 60 trillion dollar insurance policy aka the 60 trillion Dollars of assets held by the other members of the dtcc kicks in because then all of these other members of the dtcc have to give money to citadel to ensure that citadel can buy back all of their shares in the open market from us. The amc apes at the prices that we decide to sell at now.

Obviously, as i mentioned in my video the other day, it's likely that a number of apes won't sell their shares for reasonable prices or so-called reasonable prices, and therefore it's likely the fed will have to get involved as well and create some form of settlement between the Apes and the hedge funds - i am personally super excited to see gamestop stock split and their issue of a dividend guys be sure to. Let me know down in the comments below whether you think this will end up causing the short squeeze and as always guys if you enjoyed that video, be sure to check out some of my others. Alternatively, subscribe to the channel and ding that notification bell, because that way, you'll be alerted when i upload a new video cheers.