WEBVTT - This Is What Happened to the GameStop Mania 0:00:11.000 --> 0:00:14.960 Hello, and welcome to another episode of the Odd Lots Podcast. 0:00:15.000 --> 0:00:18.759 I'm Joe Wisn't and I'm Tracy Hallaway. You know, Tracy, 0:00:18.800 --> 0:00:23.439 we talked recently about the aftermath of the meme stock mania, 0:00:24.239 --> 0:00:26.520 but even within the meme stock Mania, there were some 0:00:26.600 --> 0:00:30.639 stories specifically that we're just really extraordinary and worth revisiting. 0:00:30.840 --> 0:00:34.320 Oh absolutely. I mean each one of those individual sort 0:00:34.320 --> 0:00:38.760 of stunks was fascinating to watch, but among them all, 0:00:38.880 --> 0:00:41.440 I feel like GameStop has to like that one has 0:00:41.479 --> 0:00:43.960 to stand out because that's where it started. So the 0:00:44.040 --> 0:00:47.480 two big ones were I think Game Stop and am 0:00:47.960 --> 0:00:49.559 I mean there were others, but those were like the 0:00:49.600 --> 0:00:53.159 two big ones. And I have to say, like my 0:00:53.280 --> 0:00:55.280 heart was always a little bit more with the Game 0:00:55.320 --> 0:00:59.000 Stop one because really, yeah, absolutely, because I always thought like, well, 0:00:59.040 --> 0:01:01.040 there was at least like a sort of like there 0:01:01.120 --> 0:01:04.479 was a thesis that had long preceded the boom, there 0:01:04.560 --> 0:01:08.280 was a catalyst with the stake held by Ryan Cohen, 0:01:08.520 --> 0:01:11.160 the Truy founder AMC. It was just like a little 0:01:11.200 --> 0:01:14.120 too nihilistic for my take. Well, Now, first of all, 0:01:14.440 --> 0:01:17.039 Ryan Cohen came in kind of late, I would say 0:01:17.319 --> 0:01:19.880 to you know, after a lot of this had already happened, 0:01:19.880 --> 0:01:22.560 but I was always partial to AMC just because I 0:01:22.600 --> 0:01:25.000 really like going to the movies. I like that people 0:01:25.040 --> 0:01:27.399 were throwing money at it at a time when it 0:01:27.480 --> 0:01:30.800 wasn't really clear if it was going to survive. Whereas 0:01:30.840 --> 0:01:33.360 games Stopped, game Stop just seemed like another brick and 0:01:33.360 --> 0:01:37.280 mortar video game retailer. Right, but okay, we're gonna keep 0:01:37.360 --> 0:01:39.760 arguing about this. But with game Stop, there was like 0:01:39.800 --> 0:01:42.480 a crew of people who are the AMC thing sort 0:01:42.480 --> 0:01:46.240 of came out with nowhere, so all through long before 0:01:46.280 --> 0:01:49.680 the spike, and like January and February, there was a 0:01:49.720 --> 0:01:53.000 community of people putting together this idea that there was 0:01:53.080 --> 0:01:56.880 something that the market misunderstood game stuff, that the market 0:01:56.920 --> 0:01:59.280 viewed this as a brick and mortar retailer in terminal 0:01:59.320 --> 0:02:02.840 decline eventual zero, and at least there was some contingent 0:02:02.880 --> 0:02:05.040 of people who thought it wasn't going to be that 0:02:05.680 --> 0:02:10.279 and be the whole sort of like short Squeeze engineered 0:02:10.320 --> 0:02:13.640 on Wall Street bets was like a game Stop thesis originally, 0:02:13.680 --> 0:02:16.400 like that that the fame As post was about, there 0:02:16.440 --> 0:02:19.440 is an opportunity in game Stop. Specifically, I remember having 0:02:19.440 --> 0:02:22.520 this argument with you last year, which was was it 0:02:22.680 --> 0:02:25.200 purely a technical squeeze or was there some sort of 0:02:25.240 --> 0:02:29.720 fundamental bowl story embedded in Game Stop? And I mean, 0:02:29.720 --> 0:02:32.520 I gotta say so. Obviously, the share price has come 0:02:32.560 --> 0:02:37.399 down quite a lot since early However, looking at it now, 0:02:37.960 --> 0:02:40.680 it's still above a hundred dollars per share. It's almost 0:02:40.680 --> 0:02:43.400 a hundred thirty dollars per share compared to around like 0:02:43.560 --> 0:02:46.640 fifteen dollars when we started. So even if it was 0:02:46.680 --> 0:02:51.520 a technical squeeze, something has changed and someone in the 0:02:51.560 --> 0:02:55.200 market clearly sees more value there. So in in summer, 0:02:56.080 --> 0:02:58.239 like a five dollar stock, then it rocketed to like 0:02:59.040 --> 0:03:01.399 fifty so seventy bagger in a few months. It has 0:03:01.400 --> 0:03:05.240 come way down, but it's still at so well ahead 0:03:05.280 --> 0:03:08.280 of where it was pre squeeze. So the question is like, 0:03:08.480 --> 0:03:11.640 what's going on? Is there something real did actually happen? 0:03:11.680 --> 0:03:14.200 And what what all happened at games right? And how 0:03:14.280 --> 0:03:17.280 did the meme stock frenzy actually feed into that? Did 0:03:17.280 --> 0:03:20.360 it actually have a fundamental impact on the company the 0:03:20.360 --> 0:03:23.400 health of the company itself? All Right? So today we're 0:03:23.440 --> 0:03:26.280 going to be revisiting Game Stop, and we are going 0:03:26.320 --> 0:03:29.320 to have a guest back who he had on Early 0:03:30.120 --> 0:03:32.760 one last time. But also he was one of the 0:03:32.840 --> 0:03:36.360 true Game Stop long so he didn't just come in 0:03:36.440 --> 0:03:38.960 at the peak, like you know, he's not just apen 0:03:39.040 --> 0:03:41.400 to it. He had a thesis, here's a ball. He 0:03:41.560 --> 0:03:44.080 argued for many months that it was a misunderstood stock, 0:03:44.200 --> 0:03:46.600 and he made a lot of money. And we're going 0:03:46.640 --> 0:03:49.560 to revisit the game Stop story. We're gonna be speaking 0:03:49.560 --> 0:03:52.080 with Rod Alsman, who is the managing director of Wook 0:03:52.280 --> 0:03:55.520 Capital and he's the co founder of gm E d 0:03:55.680 --> 0:03:59.680 D dot com, which sort of has long catalog the 0:03:59.720 --> 0:04:03.560 long Game Stopped thesis. So Rod, thank you so much 0:04:03.600 --> 0:04:06.840 for coming back on odd lots. Thanks for having me back. 0:04:06.880 --> 0:04:10.040 A lot less stressful recording it today than when we 0:04:10.080 --> 0:04:12.120 recorded it at the peak of the mania. Those were 0:04:12.120 --> 0:04:15.280 a while times because I think like we recorded an 0:04:15.280 --> 0:04:19.320 episode and news broken in the middle, or like you know, 0:04:19.360 --> 0:04:21.400 we were talking to you, right, we were talking to 0:04:21.400 --> 0:04:23.520 you and something happened in the middle of the conversation 0:04:23.600 --> 0:04:25.960 and it was like it moved fifty I don't remember 0:04:26.000 --> 0:04:27.480 what it was because at that time was so crazy, 0:04:27.520 --> 0:04:30.160 But those were fun times, doesn't right, I mean, it 0:04:30.200 --> 0:04:32.560 was stressful, but it was fun, right, Both all of 0:04:32.560 --> 0:04:36.680 the above. Maybe maybe just to begin with, you could 0:04:36.720 --> 0:04:39.919 give us, uh, just remind us, like, what was it 0:04:40.200 --> 0:04:44.760 about game Stop that you thought was misunderstood before early 0:04:46.320 --> 0:04:49.440 before all of this happened. Yeah, Tracy all kind of 0:04:49.440 --> 0:04:53.240 rehash and summarized my experience with the company. So Joe 0:04:53.240 --> 0:04:55.760 said months it was years for me. I had begune 0:04:55.800 --> 0:05:01.400 accumulating a position. In late I received the company is 0:05:02.400 --> 0:05:04.440 a value play at that point in time, I thought 0:05:04.440 --> 0:05:07.920 that there was plenty of opportunity for them to generate 0:05:08.000 --> 0:05:10.960 cash flow both in the near term and through the 0:05:10.960 --> 0:05:13.520 next video game cycle, which was still a few years out. 0:05:13.520 --> 0:05:16.840 At that point, I was very early the stock. Uh. 0:05:17.400 --> 0:05:20.360 A lot happened from an activist perspective in the stock 0:05:20.839 --> 0:05:26.320 between ten and Tiger management wrote the company a letter 0:05:26.480 --> 0:05:30.120 encouraging they do a strategic review. They ended up selling 0:05:30.160 --> 0:05:33.400 off their cell phone retail business that they had bought, 0:05:33.480 --> 0:05:36.800 as that was their attempted means to diversify away from 0:05:36.800 --> 0:05:41.120 physical gaming. It was a poor decision earned some capital 0:05:41.160 --> 0:05:43.560 that way, but regardless, they almost sold the company to 0:05:43.680 --> 0:05:46.880 Apollo or Sycamore. Bloomberg and Wall Street Journal reported in 0:05:47.240 --> 0:05:51.320 late early twenty nineteen that fell through they didn't sell 0:05:51.360 --> 0:05:53.040 the company. It was sixteen bucks to share at the 0:05:53.080 --> 0:05:56.440 beginning of twenty nineteen. UH new management team comes in 0:05:57.080 --> 0:06:00.200 and they slashed the dividend to zero. Long story shot. 0:06:00.279 --> 0:06:03.400 By August of nineteen, the stock has fallen down to 0:06:03.400 --> 0:06:06.680 about three bucks from sixteen. That's the time that I 0:06:06.720 --> 0:06:10.440 think a lot more people became aware of this idea 0:06:10.520 --> 0:06:13.120 that it's not just in terminal decline or at least 0:06:13.160 --> 0:06:17.080 there's enough opportunity at three dollars per share to get 0:06:17.080 --> 0:06:19.640 a reasonable rate of return. Michael Burry wrote the board 0:06:19.839 --> 0:06:23.680 a letter and they had an authorization effectively that they 0:06:23.680 --> 0:06:26.920 could repurchase eighty percent of the shares outstanding with their 0:06:26.960 --> 0:06:30.120 existing cash on hand. So like when people actually look 0:06:30.160 --> 0:06:33.240 at the balance sheet, it just didn't make any sense 0:06:33.320 --> 0:06:35.159 the way that the market was pricing it. I think 0:06:35.160 --> 0:06:38.200 it was um some forced selling from when they slashed 0:06:38.200 --> 0:06:41.080 the dividend of zero blah blah blah. Fast for us 0:06:41.120 --> 0:06:43.760 into twenty we all know that COVID doesn't happened, and 0:06:43.760 --> 0:06:46.320 and then we get to August of twenty when Ryan 0:06:46.400 --> 0:06:49.039 Cohen files his first third ten D and that's when 0:06:49.040 --> 0:06:52.640 things just go into hyper drive and UH, a lot 0:06:52.680 --> 0:06:59.760 happened between August and January one. But there, you know, 0:06:59.760 --> 0:07:01.719 there are points at which the company had a net 0:07:01.720 --> 0:07:03.960 cash position of five bucks to share on its balance 0:07:04.000 --> 0:07:05.799 sheet and it was trading at three bucks to share. 0:07:05.839 --> 0:07:08.720 So it's you know, you had cell side analysts putting 0:07:08.720 --> 0:07:11.920 a price target of a dollar sixty um like stuff. 0:07:11.960 --> 0:07:15.119 That just didn't make any sense to me, at least 0:07:15.240 --> 0:07:18.320 clearly it made sense to some people. Um. And and 0:07:18.400 --> 0:07:21.600 then of course you can't talk about it without discussing 0:07:21.600 --> 0:07:23.560 the fact that you know there was a very large 0:07:23.560 --> 0:07:26.200 short position in the stock that that was correct for 0:07:26.240 --> 0:07:28.920 many years, right, Melvin Capital is the most well known 0:07:29.120 --> 0:07:33.200 who initiated the short and teen Obviously I'd love to 0:07:33.200 --> 0:07:36.360 talk about disclosure through this conversation a little bit, but 0:07:36.720 --> 0:07:40.120 we know that they were up plus but for whatever reason, 0:07:40.200 --> 0:07:42.920 they felt that their risk reward was worthwhile to keep 0:07:42.920 --> 0:07:44.840 the shore on even when the stock traded at a 0:07:44.840 --> 0:07:48.760 meaningful discount connect cash and the rest is history. So 0:07:49.400 --> 0:07:52.480 you mentioned the analyst price targets there, and I mean, 0:07:52.520 --> 0:07:55.120 even now a lot of people are quite bearish on 0:07:55.160 --> 0:07:57.640 the stock. But what was what was the bear case here? 0:07:57.920 --> 0:08:01.119 What was it that people thought Stop was getting wrong? 0:08:02.360 --> 0:08:07.600 I think the simple Bear case was that, by virtue 0:08:07.640 --> 0:08:12.400 of being primarily a purveyor of physical video game software 0:08:12.440 --> 0:08:16.440 products and specifically used products to drive the bulk of 0:08:16.480 --> 0:08:21.480 their gross margin, as those profit streams evaporate, and the 0:08:21.520 --> 0:08:24.160 Bears would argue more quickly than than I think the 0:08:24.200 --> 0:08:27.600 bulls uh that as that disappears, there's simply no way 0:08:27.640 --> 0:08:31.320 to replace that lost profit, and it will be structurally 0:08:31.640 --> 0:08:35.319 incapable of generating meaningful profits into the future. I do 0:08:35.480 --> 0:08:40.800 think that they missed what happened in twenty nineteen. You know, 0:08:40.800 --> 0:08:43.320 we talked about it last time that Tyke Kim interviewed 0:08:43.320 --> 0:08:45.719 Mike Burry and nineteen talking about the fact that the 0:08:46.520 --> 0:08:49.679 Xbox series X the PlayStation five will have disc drives, 0:08:49.760 --> 0:08:54.000 and inherently, um, I think his perception, my perception was 0:08:54.120 --> 0:08:56.400 they have at least one more cycle that they'll have 0:08:56.520 --> 0:08:58.920 meaningful physical video game sales, and even as that pie 0:08:59.040 --> 0:09:03.240 continues to shrink for the physical portion, there's still an 0:09:03.280 --> 0:09:07.040 opportunity for them to generate meaningful free cash into you know, 0:09:07.960 --> 0:09:11.000 late twenties when the next video game cycle comes around, 0:09:11.000 --> 0:09:13.600 and who knows, right if the next Xbox or PlayStation 0:09:13.640 --> 0:09:15.880 will have a disk drive, but in twenty nineteen it 0:09:15.920 --> 0:09:18.280 was made clear that they would. I think Bears felt 0:09:18.280 --> 0:09:21.600 like consumer demand for digital would be far larger than physical. 0:09:22.040 --> 0:09:25.040 Um though, if you look at the production numbers, and 0:09:25.120 --> 0:09:26.840 I think everything that I've seen reported is that the 0:09:26.880 --> 0:09:30.320 mix of physical for example, PlayStation, it's I've seen anywhere 0:09:30.320 --> 0:09:34.240 from seventy of the actual consoles are the physical console 0:09:34.280 --> 0:09:37.160 as opposed to the digital only console without a drive. 0:09:37.760 --> 0:09:40.800 So not that everyone buying those physical consoles only buys 0:09:40.800 --> 0:09:44.240 physical discs, but that optionality and there is real value there. 0:09:44.480 --> 0:09:46.600 You know, if you buy a game for sixty bucks 0:09:46.640 --> 0:09:48.240 and you decide I don't love it, well, if you 0:09:48.280 --> 0:09:50.640 paid it for a digital download, you have no residual value, 0:09:50.640 --> 0:09:53.240 whereas you could otherwise sell it back treated in have 0:09:53.400 --> 0:09:56.240 some economic value there. That's interesting. I hadn't thought about that. 0:09:56.360 --> 0:09:59.080 So in theory, like part of the turnaround plan, and 0:09:59.080 --> 0:10:02.080 we're gonna get to what Ryan Cohen and management have 0:10:02.200 --> 0:10:04.440 done over the last year and a half. But you know, 0:10:04.480 --> 0:10:07.920 in theory, like part of the turnaround plan is okay, 0:10:07.920 --> 0:10:09.920 they're gonna get into n f T s and digital 0:10:10.000 --> 0:10:12.400 and be something more than a brick and mortar retailer. 0:10:12.480 --> 0:10:16.480 But the argument that you're making is that people just 0:10:16.640 --> 0:10:21.439 mistakenly assumed brick and mortar physical CDs were zero and 0:10:21.520 --> 0:10:23.560 when you look at the because of you know, that's 0:10:23.559 --> 0:10:25.559 just what everyone assumes these days. But when you look 0:10:25.559 --> 0:10:28.880 at actual gamer behavior, what they're actually spending, how they're spending, 0:10:28.880 --> 0:10:32.080 where they're buying, that was just a mistaken assumption. Is 0:10:32.080 --> 0:10:35.079 that a mistaken assumption? Still, like, what is the value 0:10:35.200 --> 0:10:38.920 of just sort of the good old fashioned game stop, 0:10:39.320 --> 0:10:43.120 walk into a strip mall location and buy a disk? 0:10:43.320 --> 0:10:45.600 If you think about on its face, why is there 0:10:45.640 --> 0:10:48.160 any value to buy it from them, us anyone else? 0:10:48.240 --> 0:10:52.520 And and there isn't. Uh That said, my experience, and 0:10:53.040 --> 0:10:55.960 from my research, the experience of most consumers who engage 0:10:56.000 --> 0:10:58.679 with them, is that, look, why is there any specialty 0:10:58.720 --> 0:11:02.680 retail right? Why doesn't Amazon and Walmart and targets split 0:11:02.720 --> 0:11:06.280 the entire market? Well? In Game Stops case, the finding, 0:11:06.559 --> 0:11:08.920 or at least what the company reported, I think it 0:11:08.960 --> 0:11:11.959 was in twenty nineteen one of the calls, they disclosed 0:11:11.960 --> 0:11:15.960 that uh, physical game products or gaming products they sold 0:11:16.240 --> 0:11:19.440 at a two x attached rate to the big box retailers, 0:11:19.440 --> 0:11:22.880 the generalists and accessories they sold at a three x 0:11:22.920 --> 0:11:26.839 attach rate. So on this era of direct to consumer, right, 0:11:26.880 --> 0:11:29.760 if you're a if you're a Sony or Microsoft, sure 0:11:29.880 --> 0:11:33.199 you'd prefer to own the direct consumer relationship and sell 0:11:33.679 --> 0:11:36.199 without even giving any cut of the margin to the retailer. 0:11:36.320 --> 0:11:39.800 But in the case of game Stop, from that uh, 0:11:39.840 --> 0:11:42.400 you know, from that distribution angle, they're they're the best 0:11:42.559 --> 0:11:46.319 distributor that the supplier could have to ask for. And 0:11:46.360 --> 0:11:48.240 I think that part of that was evidenced by the 0:11:48.280 --> 0:11:54.240 Microsoft strategic agreement that happened in October of wherein basically 0:11:54.240 --> 0:11:58.920 they they uh indicated that there would be game Stop 0:11:59.040 --> 0:12:02.920 taking a cut of all incremental sales that occur on 0:12:03.120 --> 0:12:06.240 hardware sold from game Stop. So if game Stop sells 0:12:06.280 --> 0:12:09.400 you the Xbox Series X and you go and download 0:12:09.440 --> 0:12:11.800 games on it, game Stop is gonna get some undisclosed 0:12:11.800 --> 0:12:15.640 small portion of those incremental sales. So that was a 0:12:15.679 --> 0:12:17.559 big thing to me is and I think a lot 0:12:17.559 --> 0:12:21.000 of other investors because it implied, well, these distributors and 0:12:21.040 --> 0:12:24.800 suppliers see value and game Stop obviously for the customer 0:12:24.840 --> 0:12:27.679 to see value, it needs to be a differentiated experience, 0:12:28.679 --> 0:12:32.040 whether that's um the customer service angle, you know, if 0:12:32.040 --> 0:12:34.400 you walk into most game stops, most of the employees 0:12:34.440 --> 0:12:37.760 and those stores are pretty pretty hardcore video gamers. They 0:12:37.760 --> 0:12:40.319 may have a different niche, you know, employee by employee, 0:12:40.360 --> 0:12:42.839 but you get insight into different games that you might 0:12:42.880 --> 0:12:44.720 not have otherwise been familiar with. Whereas you go to 0:12:44.760 --> 0:12:47.840 a Walmart and you know it's behind lock and key, 0:12:47.880 --> 0:12:50.280 you need to grab some random employee if you want 0:12:50.320 --> 0:12:52.480 to get the game. They don't know anything about gaming. 0:12:52.559 --> 0:12:56.319 So so that specialty experience I think is the differentiator, 0:12:56.400 --> 0:12:59.319 and it was evidenced by their ability to drive incremental attachment. 0:13:00.000 --> 0:13:01.880 So why don't we fast forward a little bit and 0:13:01.920 --> 0:13:05.280 talk about what's happened since then? And you know, we 0:13:05.280 --> 0:13:07.560 talked about Ryan Cohen. He became chairman. I think it 0:13:07.640 --> 0:13:10.800 was late last year, was that right, something like that, 0:13:11.480 --> 0:13:14.280 um or maybe it was the summer, Okay, So he 0:13:14.360 --> 0:13:17.199 becomes chairman and he starts putting in place all these 0:13:17.240 --> 0:13:20.840 different ways to increase game stops business. And some of 0:13:20.880 --> 0:13:23.440 the stuff he's been doing, you know, things like starting 0:13:23.480 --> 0:13:27.640 an n f T marketplace, stuff like that. It seems 0:13:27.679 --> 0:13:32.160 a little bit different to the original game stop mission 0:13:32.480 --> 0:13:35.320 or bread and butter business. And I'm curious what you 0:13:35.440 --> 0:13:39.480 actually think of that, Like, you had a bowl case 0:13:39.559 --> 0:13:42.640 based on GameStop being a video game retailer and thinking 0:13:42.679 --> 0:13:46.240 that it could grab a decent slice of the digital market, 0:13:46.320 --> 0:13:47.839 or at least more of it, and that there would 0:13:47.880 --> 0:13:51.560 still be demand for physical games and people would want 0:13:51.600 --> 0:13:54.439 to go into a store where the customer sales people 0:13:54.520 --> 0:13:57.160 actually know video gaming and stuff like that. What do 0:13:57.200 --> 0:14:00.840 you think about these diversification efforts and does that change 0:14:00.880 --> 0:14:03.760 the nature of the business in your view? So we 0:14:04.320 --> 0:14:10.000 put out in January UM the accumulated sum total of 0:14:10.080 --> 0:14:13.880 all myself and and a cohort of other investors who 0:14:13.920 --> 0:14:17.880 were maniacally focused on this company from host of especially 0:14:17.920 --> 0:14:20.240 after Cohen became involved. You know, we we put out 0:14:20.240 --> 0:14:23.240 a report with a you know, a hundred sixty nine 0:14:23.600 --> 0:14:27.160 and forty two cent bull case price target, which obviously 0:14:27.320 --> 0:14:31.840 was was half meme, but what was underpinned by real analysis. 0:14:32.040 --> 0:14:34.000 One of the pieces of analysis we got wrong was 0:14:34.040 --> 0:14:38.200 we perceived there was value for an advertising technology oriented business. 0:14:38.320 --> 0:14:41.320 They have tens of millions of customers, they have access 0:14:41.360 --> 0:14:45.160 to reams of consumer data on gaming preferences, and our 0:14:45.280 --> 0:14:48.640 view at the time was um I had begun seeing 0:14:48.640 --> 0:14:52.760 them into great targeted advertisements on their web platform. I 0:14:52.800 --> 0:14:54.640 thought that was the angle they were going, and maybe 0:14:54.680 --> 0:14:57.840 it was the angle to prior management team was going. UM, 0:14:57.880 --> 0:15:00.400 they haven't gone that angle, but I think at its core, 0:15:01.040 --> 0:15:05.160 the value is tapping into the fact that I'm looking 0:15:05.160 --> 0:15:07.360 at the proxy statement and what they say is that 0:15:07.400 --> 0:15:11.080 we have a unique opportunity to be a conduit between developers, publishers, 0:15:11.080 --> 0:15:14.560 and consumers as gaming shifts from consoles to the metaverse 0:15:14.560 --> 0:15:16.760 and other frontiers. And that was really the core of 0:15:16.800 --> 0:15:19.800 my view was that Game Stop was that physical nexus 0:15:19.840 --> 0:15:23.480 of gaming, and that they can play into digital and 0:15:23.480 --> 0:15:26.440 play into this shift, and that they're not necessarily d 0:15:26.520 --> 0:15:29.560 o a. UM the direction Cohen went, you know, Tracy, 0:15:29.640 --> 0:15:35.120 he he had the settlement in early January one where UM, 0:15:35.160 --> 0:15:37.120 it had looked like it was going to become a 0:15:37.120 --> 0:15:40.080 proxy fight. There had been previous proxy fights with the 0:15:40.120 --> 0:15:44.720 company over the preceding year, UM successful proxy campaign, so 0:15:44.800 --> 0:15:47.800 it looked like Cohen was going that route. There was 0:15:47.840 --> 0:15:50.400 instead of settlement, I think because you know, look, I 0:15:50.440 --> 0:15:53.600 collected four percent of shares outstanding and sent him a 0:15:53.680 --> 0:15:56.800 letter on behalf of those retail shareholders who those four 0:15:56.840 --> 0:15:59.480 percent shares reflected and said, you have our support if 0:15:59.520 --> 0:16:02.960 it comes to this year's proxy fight. So I'm sure 0:16:03.040 --> 0:16:06.960 he had accumulated shares from others. Um. You know in 0:16:07.000 --> 0:16:08.880 the intro, Joe you mentioned I now am I am 0:16:08.920 --> 0:16:12.680 at Wook Capital and whoop Capital was specifically formed as 0:16:12.720 --> 0:16:15.800 a byproduct of really the core work that went into 0:16:15.800 --> 0:16:20.560 this crowdsourcing of the investment thesis UM and John Kim, 0:16:20.680 --> 0:16:23.360 John's the c i O at what the founder. John 0:16:23.360 --> 0:16:25.600 had owned one percent of of game Stop and been 0:16:25.640 --> 0:16:28.440 the largest contributor to that four percent. John had the 0:16:28.480 --> 0:16:32.080 opportunity to meet with Ryan in December and here his vision. 0:16:32.480 --> 0:16:34.280 So I think that the people who really did the 0:16:34.360 --> 0:16:37.480 legwork understood there wasn't This wasn't just some scheme that 0:16:37.520 --> 0:16:39.320 the guy cooked up out of the blue. He had 0:16:39.360 --> 0:16:43.720 a vision. You know clearly that I knew nothing about 0:16:43.720 --> 0:16:46.560 blockchain and crypto other than just what I read UM. 0:16:46.600 --> 0:16:49.240 I was not an active participant in the blockchain or 0:16:49.280 --> 0:16:53.440 crypto ecosystems. I had never bought any crypto until very recently, 0:16:53.880 --> 0:16:57.880 I've begun dabbling in n f T. But that does 0:16:58.000 --> 0:17:03.200 seem logical, right if if it's creators gamers are consuming this. 0:17:03.480 --> 0:17:06.280 It's a forty one billion dollar addressable market, and we 0:17:06.280 --> 0:17:09.520 can argue how sustainable that is. It's very logical to 0:17:09.520 --> 0:17:12.960 me that they've gone that route. Is their digital growth strategy, 0:17:13.000 --> 0:17:16.800 and that's underpinned by them really doubling down on making 0:17:16.800 --> 0:17:20.280 their existing business better. They hadn't done any investment really 0:17:20.320 --> 0:17:24.600 into like digital systems, their website, their mobile app, e fulfillment. UM. 0:17:24.640 --> 0:17:28.640 They've made multiple fulfillment network investments over the last year. UM, 0:17:28.720 --> 0:17:31.760 they've improved their service. If you think about Chewy, people 0:17:31.920 --> 0:17:34.600 know them for you know Chew, we will send pet 0:17:34.600 --> 0:17:37.720 owners a happy birthday when it's the pet owners birthday. UM. 0:17:37.800 --> 0:17:40.520 I'm seeing now Game Stop doing a lot more of 0:17:40.560 --> 0:17:43.960 that customer engagement during interactions UM. In the g M 0:17:43.960 --> 0:17:45.720 E d D discord server, I see a lot of 0:17:45.720 --> 0:17:48.760 people sharing different examples of their own experience. So there's 0:17:48.960 --> 0:17:52.960 definitely been a change in the customer experience with that 0:17:53.359 --> 0:17:56.679 top down view from Cohen. UM. He became chairman in March. 0:17:56.800 --> 0:18:00.480 I believe it was so they The first porting of 0:18:00.520 --> 0:18:02.560 anything n f T related was from g M E 0:18:02.640 --> 0:18:04.760 D D and it was in April of one. So 0:18:04.800 --> 0:18:06.840 this is not stuff that they've just pulled out of 0:18:06.840 --> 0:18:08.560 the blue. They've been working on it for quite some 0:18:08.640 --> 0:18:11.119 time now. Um they've committed to bring in the marketplace 0:18:11.160 --> 0:18:13.080 to bear by the end of the fiscal second quarters, 0:18:13.119 --> 0:18:15.240 so the end of July. So you know, a lot's 0:18:15.240 --> 0:18:17.960 happening behind the scenes, and I think that people are 0:18:17.960 --> 0:18:21.360 so focused on just staring at the current financial statements, 0:18:21.359 --> 0:18:24.359 which you know, the companies shifted its strategy. They're forsaking 0:18:24.359 --> 0:18:28.280 margin at the expense of regaining customers back into their 0:18:28.280 --> 0:18:33.440 ecosystem for long term growth. And uh, I think COVID happened, 0:18:33.480 --> 0:18:37.560 so our initial estimates were certainly impacted there. Um digital 0:18:37.720 --> 0:18:40.760 is being adopted more quickly, it seems it'll it'll remain 0:18:40.800 --> 0:18:43.640 to be seen if what that what happens is two 0:18:43.720 --> 0:18:46.920 keeps rolling along and normalization keeps occurring. But there's a 0:18:46.920 --> 0:18:48.920 lot to unpack there, and uh, you know, we've done 0:18:48.960 --> 0:18:52.879 our best to try and be objective with it. Um. 0:18:52.920 --> 0:18:54.520 Most of the people in g M, E. D D 0:18:54.680 --> 0:18:57.800 don't have a meaningful ownership stake in game stuff. We 0:18:57.920 --> 0:19:00.639 it's just a passion project and we just feel like 0:19:01.119 --> 0:19:05.000 it's been so misrerepresented in media. It was so misrepresented 0:19:05.000 --> 0:19:07.920 in from the analyst angle for so long that we 0:19:07.920 --> 0:19:10.359 were just doing our best to present what we thought 0:19:10.400 --> 0:19:26.240 was mostly unbiased you. So, I just want to like 0:19:26.359 --> 0:19:30.119 pivot just a little bit because you mentioned that some 0:19:30.320 --> 0:19:33.160 of the money that was in the original game Stop 0:19:33.200 --> 0:19:37.160 trade has become part of what capital your current project 0:19:37.680 --> 0:19:40.000 you talked about. You know, they're still the g M, E. 0:19:40.080 --> 0:19:42.320 D D dot com discord and of course these are 0:19:42.359 --> 0:19:45.600 some of the topics recently talked about them without Lily 0:19:45.720 --> 0:19:49.199 Frankis and Kyla Scanlon. But it's like this cohort of 0:19:49.560 --> 0:19:52.840 game Stop traders, Like where are they now? I mean, uh, 0:19:52.880 --> 0:19:56.359 you know what's wearing kiddy? Where is everyone? And not 0:19:56.520 --> 0:19:59.040 just the big names like yourself and Keith Gil, but 0:19:59.720 --> 0:20:01.879 so many of the people who got excited about the trade, 0:20:01.920 --> 0:20:04.560 Like what's the distribution? How many of them are still trading? 0:20:04.600 --> 0:20:06.479 How many of them lost interests in the market, how 0:20:06.480 --> 0:20:11.080 many of them? What? What? Where's that crew now? I 0:20:11.119 --> 0:20:13.720 know you'd love to get a really clean answer, but 0:20:13.760 --> 0:20:16.560 it really is all over the spectrum. Um. In terms 0:20:16.640 --> 0:20:19.160 of you know, Keith Gil, I haven't had an opportunity 0:20:19.200 --> 0:20:22.480 to speak with him since January. Um. You know, regrettably, 0:20:22.600 --> 0:20:25.520 I'm certain he's been facing his own share of of 0:20:25.640 --> 0:20:29.000 legal reasons for for which he hasn't and look, I'll 0:20:29.040 --> 0:20:31.800 say it allowed, and I'm I'm I know I would 0:20:31.840 --> 0:20:34.119 be advised not to. But it was just about a 0:20:34.160 --> 0:20:38.840 year ago I was subpoena from SEC pertaining to my involvement. Um. 0:20:38.840 --> 0:20:41.919 It was this massively broad based subpoena asking for everything 0:20:41.960 --> 0:20:44.639 I've ever said to anyone about Game Stop for you know, 0:20:44.800 --> 0:20:47.480 more than twelve months of history. And when you think 0:20:47.520 --> 0:20:50.960 about I literally my life my second job was research 0:20:51.000 --> 0:20:53.919 and Game Stop. Yeah, it was a massive cost just 0:20:54.000 --> 0:20:57.480 to try and accumulate all of the documents. UH ended 0:20:57.560 --> 0:21:00.600 up having to say, look, I it would it would 0:21:00.640 --> 0:21:03.360 cost me hundreds of thousands of dollars to do what 0:21:03.400 --> 0:21:06.359 you're asking. You can go to the sources themselves if 0:21:06.359 --> 0:21:09.399 you would like it. I did incur meaningful expense that 0:21:09.400 --> 0:21:12.600 that breached six figures, which was more than my net 0:21:12.600 --> 0:21:15.080 worth before I entered the trade. Thank goodness, I made money. 0:21:15.440 --> 0:21:18.040 And I think that is a good example of where 0:21:18.080 --> 0:21:22.679 you see these politically motivated investigations that have, you know, 0:21:22.720 --> 0:21:27.479 I think, and misdirected towards small passionate investors who, in 0:21:27.520 --> 0:21:31.040 my opinion didn't do anything wrong. I know that there 0:21:31.040 --> 0:21:34.360 are some people who had malintent, right. You can obviously 0:21:34.440 --> 0:21:37.800 point to the Wall Street bets folks saying things like, yeah, 0:21:37.840 --> 0:21:40.840 squeeze the shorts. Well, obviously that's not an investment thesis. 0:21:41.240 --> 0:21:43.600 Um So, So with regard to Keith, I haven't spoken 0:21:43.600 --> 0:21:45.399 to him to Roaring Kitty to d f V, and 0:21:45.600 --> 0:21:49.760 I'm sure he's incurred expense comparable slash in excess of mine. 0:21:50.200 --> 0:21:52.280 But I know, you know, Michael Burry disclosed he was 0:21:52.280 --> 0:21:55.280 subpoened as well, um, which is like why the guy 0:21:55.320 --> 0:21:57.000 got out of the trade in the fourth quarter. He 0:21:57.040 --> 0:22:00.400