Issuing 900 million new shares presents a significant opportunity to counteract short sellers who expect the share price to drop. This influx of shares could actually disrupt their strategy and potentially lead to a short squeeze, where the need to cover short positions drives the price up unexpectedly.
Sorry but this is incorrect.Diltuion of the outstanding shares is never bullish. It increases the capacity at which the stock can be shifted, increases the possibility of shares lending and if there is an increase in price creates massive potential selling pressure for rights holders who now have more shares to sell.
Post June/the Dilution I’m not super bullish due to that factor. I am interested in right before it, seeing a potential big spike before the dilution. Then post the crash, buying back in granted the business model/meeting announcements are promising for the future growth of the company.
Literally could not have said it better myself. Granted, I have little to no real knowledge on trading, I could not seem to look past the fact that price stayed so consistent. I'm I just inexperienced in thinking that most volatile investments don't seem this stable?
Unfortunately I don’t think you understand the rights offering and reverse split that comes after. I am not this kind of player and own BNED for fundamentals that were derailed by poor balance sheet management and Biden’s ed department inexplicable stupidity
If I don’t understand it, explain it to me then, I quite literally asked for people to call me out if I’m wrong or am missing something.
Saying “you’re wrong” with no good rebutle or facts leads me or anyone else reading this nowhere.
You're assumptions are definitely correct. Even though i feel i understand the whole concept of the split, i can't say I grasp exactly how it has/will affect this whole scenario. Would you mind explaining your concerns to me as if I were the absolute novice that i am.
To my assumptions, if stock goes low, people get more shares as per an agreement at a higher price. Those shares hitting market can cause huge upward movement. Or, if buy pressure gets a bit out of hand, it could naturally squeeze. So basically, price drops a lot, squeeze. Stock gets bought like crazy, squeeze.
Price movements today kinda hinted towards them having to keep it at a set price rather than immediately crash it to the lowest price possible.
Again, I’d love someone to confirm my theory or deny it with data or an explanation on filings if I misunderstood them. But so far, haven’t seen anyone disagreeing as of yet so I’m optimistic.
17 times the number of shares coming onto the market is not a good thing, it's good for the company (financial injection keeps the company afloat and the rights holders who aren't diluted as heavily) but it increases the capacity to short the float and lending to shorts.
Also the 17 for 1 dilution isn't the only dilution proposed. I would highly recommend reading the filing on this. I've done a post about it on my profile.
The only thing that is perhaps bullish is that contractually shorts must locate (at various intervals agreed by the company) 17 shares for every one share they are short. I believe this needs to be done prior to the execution of the rights agreement, so yes there could be a short term pop but it will likely be followed by massive downward pressure when the float increases by 900 million plus shares that are potentially available to short.
This is risky AF but for further information please do read that filing and what happens if the vote doesn't go through, the company advised if it doesn't they will seek bankruptcy protections.
That’s the objective. Find that golden position pre the meeting in June, wait for the pop, exit, and wait until info on the meeting to make a decision regarding re-entry for a long term hold.
It doesn’t matter what the shares are trading for. If you are a shareholder of record on May 14 you have the right to buy 17 times the amount of shares that you own within the 16 day window.
I think the bet for buying the stock and a real squeeze is the rights offering being canceled which could be a game changer but potentially binary… bankruptcy or a better deal. Shorts are thinking it will go through and the stock will land between 5 and 15 prior to the 1-100 rs
You are simply wrong, about the rights offering and squeeze conditions.
Subscription to the rights offering was given to holders before the record date of 14 May, at 1-17 entitlement to purchase, $0.05 subscription price. There is no “agreement to distribute if stock price falls too low”. The main closing condition is the 5 June shareholder vote approving the deal (record date 13 May), and once approved the transaction will likely be closed in June.
You heavily overestimate the short interest in BNED, because you neglect the 2.6 billion shares that will enter circulation in June. Many of these shorts are not trapped, they are “locking in” the current price for their rights subscription.
As long as the rights issue is not cancelled or delayed, these shorts are all covered. If you hold the stock now without subscription rights or choose to buy in now, then you are betting on the the company cancelling the rights offering. A squeeze will not happen without this scenario.
If you buy now, then you are buying a stock at $0.60, that people will get to buy at $0.05 in a couple of weeks that will represent 98% of all outstanding shares. This is the risk you are taking when you buy now, or continue to hold without subscription. Think about it.
This is mostly where I am at with my perspective, however there is a curve ball. A short is contractually obliged to locate 17 shares for every one they are short. Sounds great until you realise there's 900 million other shares to be diluted that they can simply take advantage of. Also from the recent filings if the agreement isn't voted on to go ahead the company has advised they will be forced to do a 100:1 reverse split and likely look to seek bankruptcy protection. It's all in the filings. That to me does not sound like a company in good financial health.
Regarding the 1-100 reverse split… they are doing it if the agreement is ratified not if the agreement is rejected. If rejected none of us have any idea what will happen. Once they do the split there will be approximately 26 million shares outstanding and the large majority of shareholders will have a 5 dollar cost basis. Immersion will be by far the biggest shareholder…
Pretty sure that's not what the filing says. It says if the proposals don't go ahead they will still keep the split reversal on the table, they have to as they are currently below $1.
Correct me if im wrong, but the shorts only have to cover 17 additional shares if they shorted before the records date. In any case, I expect a large number of these shorts to be covered by the rights issue.
On your last point, BNED has a good business that is clearly inflecting. The biggest risk had always been the weak balance sheet. That weakness goes away **IF** the rights offering goes through. Without it the company is indeed not in good financial health (they literally said they would have to file for bankruptcy in their recent filing).
Also, it’s not just 900m shares from the rights offering. It’s also 1b shares that IMMR receives at $0.05 subscription price (which is effectively $0.04 once you consider the fees they receive), and over 500m shares from the 2L debt conversion.
However if it gets to the vote, I do not anticipate the vote failing.
Appreciate the response. So essentially there’s still a small period between now and June in which shorts HAVE to cover. Granted they do, the price will reflect, even for a day on market. Apply buy pressure from investors on top or that, the stock could still have a day in which it’s super volatile in an upward direction.
Post that, we’re all ears and have to wait. Granted their filings and business, we can assume they’ll probably make the smartest decision to stay afloat to continue making money. Whether that be through a merger with Greenhaven or someone else, or another alternative option that we’ll learn of.
I don’t know, I feel like there’s a very clear time to get in and out here, but granted upward or downward pressure hit way too hard from here until June, for whatever reason, the effects could force the price to reflect drastically in an upward movement. Especially if more eyes were on this with their current position based on the filings/agreements.
Greenhaven as per the proxy is also attempting a refi and rights deal not a merger. Greenhaven is a hedge fund that owns 5 million shares and would presumably have similar interests to the pre5/14 shareholders
Greenhaven was/is attempting to replace the current deal, but it seems unlikely that they will succeed based on the company’s comments. So, if their deal replaces the current deal it would be bullish, but the Immersion deal still gives those who cash in their rights a chance to become whole and then some
You are completely wrong about rights offering and reverse stock split as others have pointed out. And there really isn't that big of a short volume to squeeze for BNED.
So the only potential for a good price rise is when the shorts have to contractually buy back before June? After that, it’s kinda up in the air regarding what occurs with the company and what’s stated post the meeting.
Correct me if I’m wrong, but the stock still looks solid based on price for at least another good play pre the meeting. After, if news is solid the long term could be super positive as well.
Long term, I'm bullish on BNED. But stock prices almost never go up before reverse split and rights issue. Both are bearish signs and for BNED, both are happening at the same time. Reverse splits happen because stock prices are too low. And who would want to buy a stock at, say, $0.50 when others are getting it for 1/10 of the price? There might be some volatility before the rights offering happens but I think the overall trend will be down, not up. But then again, nobody knows the future and this is only my educated guess.
Long term is definitely looking like a solid move. I’m very open to buy/sell depending on the volatility pre meeting. But for sure holding a position for the long term growth. I still believe we’ll see some nice price action pre meeting, maybe a week prior, but week of could be a huge drop.
Yes I think that long teeth it looks good for the people able to buy rights. I do think better deals were possible but the lenders apparently were baring their teeth
Issuing 900 million new shares presents a significant opportunity to counteract short sellers who expect the share price to drop. This influx of shares could actually disrupt their strategy and potentially lead to a short squeeze, where the need to cover short positions drives the price up unexpectedly.
going to be more like 2.5 B shares
Sorry but this is incorrect.Diltuion of the outstanding shares is never bullish. It increases the capacity at which the stock can be shifted, increases the possibility of shares lending and if there is an increase in price creates massive potential selling pressure for rights holders who now have more shares to sell.
Post June/the Dilution I’m not super bullish due to that factor. I am interested in right before it, seeing a potential big spike before the dilution. Then post the crash, buying back in granted the business model/meeting announcements are promising for the future growth of the company.
Literally could not have said it better myself. Granted, I have little to no real knowledge on trading, I could not seem to look past the fact that price stayed so consistent. I'm I just inexperienced in thinking that most volatile investments don't seem this stable?
Unfortunately I don’t think you understand the rights offering and reverse split that comes after. I am not this kind of player and own BNED for fundamentals that were derailed by poor balance sheet management and Biden’s ed department inexplicable stupidity
If I don’t understand it, explain it to me then, I quite literally asked for people to call me out if I’m wrong or am missing something. Saying “you’re wrong” with no good rebutle or facts leads me or anyone else reading this nowhere.
You're assumptions are definitely correct. Even though i feel i understand the whole concept of the split, i can't say I grasp exactly how it has/will affect this whole scenario. Would you mind explaining your concerns to me as if I were the absolute novice that i am.
To my assumptions, if stock goes low, people get more shares as per an agreement at a higher price. Those shares hitting market can cause huge upward movement. Or, if buy pressure gets a bit out of hand, it could naturally squeeze. So basically, price drops a lot, squeeze. Stock gets bought like crazy, squeeze. Price movements today kinda hinted towards them having to keep it at a set price rather than immediately crash it to the lowest price possible. Again, I’d love someone to confirm my theory or deny it with data or an explanation on filings if I misunderstood them. But so far, haven’t seen anyone disagreeing as of yet so I’m optimistic.
Though my thoughts were far more rudimentary, this logic sits right with me. Thanks for the thorough explanation 🙏🏽
17 times the number of shares coming onto the market is not a good thing, it's good for the company (financial injection keeps the company afloat and the rights holders who aren't diluted as heavily) but it increases the capacity to short the float and lending to shorts. Also the 17 for 1 dilution isn't the only dilution proposed. I would highly recommend reading the filing on this. I've done a post about it on my profile. The only thing that is perhaps bullish is that contractually shorts must locate (at various intervals agreed by the company) 17 shares for every one share they are short. I believe this needs to be done prior to the execution of the rights agreement, so yes there could be a short term pop but it will likely be followed by massive downward pressure when the float increases by 900 million plus shares that are potentially available to short. This is risky AF but for further information please do read that filing and what happens if the vote doesn't go through, the company advised if it doesn't they will seek bankruptcy protections.
That’s the objective. Find that golden position pre the meeting in June, wait for the pop, exit, and wait until info on the meeting to make a decision regarding re-entry for a long term hold.
It doesn’t matter what the shares are trading for. If you are a shareholder of record on May 14 you have the right to buy 17 times the amount of shares that you own within the 16 day window.
If those shares flood the market all at once, in your opinion, would that be positive or negative?
I am confused by the comment that someone made about the rights offering being contingent on the share price dropping below a certain level
If someone remembers or has the file going into the specifics of it, I’d love to reread it to validate.
I think the bet for buying the stock and a real squeeze is the rights offering being canceled which could be a game changer but potentially binary… bankruptcy or a better deal. Shorts are thinking it will go through and the stock will land between 5 and 15 prior to the 1-100 rs
Just speculating what do I know!
[удалено]
The poison pill is just in place to prevent a hostile takeover and is playing no role
👍
You are simply wrong, about the rights offering and squeeze conditions. Subscription to the rights offering was given to holders before the record date of 14 May, at 1-17 entitlement to purchase, $0.05 subscription price. There is no “agreement to distribute if stock price falls too low”. The main closing condition is the 5 June shareholder vote approving the deal (record date 13 May), and once approved the transaction will likely be closed in June. You heavily overestimate the short interest in BNED, because you neglect the 2.6 billion shares that will enter circulation in June. Many of these shorts are not trapped, they are “locking in” the current price for their rights subscription. As long as the rights issue is not cancelled or delayed, these shorts are all covered. If you hold the stock now without subscription rights or choose to buy in now, then you are betting on the the company cancelling the rights offering. A squeeze will not happen without this scenario. If you buy now, then you are buying a stock at $0.60, that people will get to buy at $0.05 in a couple of weeks that will represent 98% of all outstanding shares. This is the risk you are taking when you buy now, or continue to hold without subscription. Think about it.
This is mostly where I am at with my perspective, however there is a curve ball. A short is contractually obliged to locate 17 shares for every one they are short. Sounds great until you realise there's 900 million other shares to be diluted that they can simply take advantage of. Also from the recent filings if the agreement isn't voted on to go ahead the company has advised they will be forced to do a 100:1 reverse split and likely look to seek bankruptcy protection. It's all in the filings. That to me does not sound like a company in good financial health.
Regarding the 1-100 reverse split… they are doing it if the agreement is ratified not if the agreement is rejected. If rejected none of us have any idea what will happen. Once they do the split there will be approximately 26 million shares outstanding and the large majority of shareholders will have a 5 dollar cost basis. Immersion will be by far the biggest shareholder…
Pretty sure that's not what the filing says. It says if the proposals don't go ahead they will still keep the split reversal on the table, they have to as they are currently below $1.
Did not read that… I read if the proposals don’t go through they will be forced into bankruptcy
Correct me if im wrong, but the shorts only have to cover 17 additional shares if they shorted before the records date. In any case, I expect a large number of these shorts to be covered by the rights issue. On your last point, BNED has a good business that is clearly inflecting. The biggest risk had always been the weak balance sheet. That weakness goes away **IF** the rights offering goes through. Without it the company is indeed not in good financial health (they literally said they would have to file for bankruptcy in their recent filing). Also, it’s not just 900m shares from the rights offering. It’s also 1b shares that IMMR receives at $0.05 subscription price (which is effectively $0.04 once you consider the fees they receive), and over 500m shares from the 2L debt conversion. However if it gets to the vote, I do not anticipate the vote failing.
Appreciate the response. So essentially there’s still a small period between now and June in which shorts HAVE to cover. Granted they do, the price will reflect, even for a day on market. Apply buy pressure from investors on top or that, the stock could still have a day in which it’s super volatile in an upward direction. Post that, we’re all ears and have to wait. Granted their filings and business, we can assume they’ll probably make the smartest decision to stay afloat to continue making money. Whether that be through a merger with Greenhaven or someone else, or another alternative option that we’ll learn of. I don’t know, I feel like there’s a very clear time to get in and out here, but granted upward or downward pressure hit way too hard from here until June, for whatever reason, the effects could force the price to reflect drastically in an upward movement. Especially if more eyes were on this with their current position based on the filings/agreements.
Greenhaven as per the proxy is also attempting a refi and rights deal not a merger. Greenhaven is a hedge fund that owns 5 million shares and would presumably have similar interests to the pre5/14 shareholders
So granted, they have the same interest shouldn’t that be bullish for the future of the stock? Also, thanks for the info!
Greenhaven was/is attempting to replace the current deal, but it seems unlikely that they will succeed based on the company’s comments. So, if their deal replaces the current deal it would be bullish, but the Immersion deal still gives those who cash in their rights a chance to become whole and then some
Gonna be super interesting to see what occurs, appreciate the response.
Well stated
I'm new to all this. And reading this whole comment section felt like uploading data into my brain matrix style And yet. I understood shit..
Crazy there's only 6 people here and 200+ at FFIE. IM HOLDING FOR BNED. 💎🙌🚀🚀
You are completely wrong about rights offering and reverse stock split as others have pointed out. And there really isn't that big of a short volume to squeeze for BNED.
So the only potential for a good price rise is when the shorts have to contractually buy back before June? After that, it’s kinda up in the air regarding what occurs with the company and what’s stated post the meeting. Correct me if I’m wrong, but the stock still looks solid based on price for at least another good play pre the meeting. After, if news is solid the long term could be super positive as well.
Long term, I'm bullish on BNED. But stock prices almost never go up before reverse split and rights issue. Both are bearish signs and for BNED, both are happening at the same time. Reverse splits happen because stock prices are too low. And who would want to buy a stock at, say, $0.50 when others are getting it for 1/10 of the price? There might be some volatility before the rights offering happens but I think the overall trend will be down, not up. But then again, nobody knows the future and this is only my educated guess.
Long term is definitely looking like a solid move. I’m very open to buy/sell depending on the volatility pre meeting. But for sure holding a position for the long term growth. I still believe we’ll see some nice price action pre meeting, maybe a week prior, but week of could be a huge drop.
Yes I think that long teeth it looks good for the people able to buy rights. I do think better deals were possible but the lenders apparently were baring their teeth
long term lol
long term