Friday - August 5, 2022

Today's newsletter will take 3.55 minutes to read.

DRS UPDATE: 51.338*% (estimated percent of shares direct registered) 

*source: Computershared.net

Why is Friday a happy day?

Because the next day is a sadder day. /joke

In case you didn't know, Tim is a Scrabble fanatic.

We continue to receive valuable feedback from our readers - thank you. Yesterday, it was suggested that we add a daily fact to the newsletter. You asked - we listened! Today marks the first publication with a new Did You Know? section. Please keep the suggestions coming!

Good Morning! This is Mother Squeezer, the fun newsletter bringing you updates and insights about our favorite Activist Investor, Ryan Cohen, and our favorite stocks - GME and BBBY.

We did it! Three consecutive positive days for both Bed Bath and Beyond and GameStop.

Unless you're in Germany, it may be too early for das Bier. We just finished up our second coffee of the morning, currently enjoying Pacific Rim Vienna Roast Organic Coffee which we've found to be one of the best values in the java department. Check your local Whole Foods for availability.

Bed Bath and Beyond

BBBY popped higher right out of the gate yesterday. We climbed steadily from open, peaking out at $6.49 before we saw a chop down. We closed at $6.15, up 1.32% on the day. Trading volume came in just under average at 8.95 million shares changing hands.

The borrowable shares never substantially appeared during the trading day. There was never more than 30,000 available. There was 50,000 shares this morning available to borrow of which 40,000 were borrowed already. The cost to borrow has dropped as well. We're back down into the 4%'s. Today is Friday which means a potential impact of options affecting the price. We'll go into max pain below.

GameStop

GameStop closed up 1.13% ending the day at $38.36. Yesterday, we exceeded the average trading volume for the first time this week. There were 5.38 million shares that were exchanged, coming in right above the average of 5.15 million shares. When you adjust for pre split activity, we're still really low on volume. Again, nothing to be concerned about - just notating so that when the surge of volume comes, you'll understand what we're talking about.

Did you know?

GameStop originated from a Dallas, Texas retailer founded in 1984 called Babbage's. Babbage's was named after Charles Babbage (1791-1871), aka "father of the computer". He was the first person to conceptualize a digital programmable computer. Before being known as "GameStop", it was originally named Funco.

Max Pain

How familiar are you with  max pain? No, not the Simpsons character that Homer portrayed...oh wait, that was Max Power.

Anyhow, max pain is the strike price with the most open options contracts (i.e., puts and calls), and it is the price at which the stock would cause financial losses for the largest number of option holders at expiration. Translation - the closer a stock closes on Friday to max pain, the less the options makers lose.

Since options expire on Fridays, max pain potentially becomes more of a factor. For the last few weeks, GameStop has been closing right around the weekly max pain price and Bed Bath and Beyond has been coming in below. Sometimes well below. For today, the max pain for GME is $35 and for Bed Bath and Beyond it's $5.

The popcorn stock announced earnings yesterday stating it had narrowing losses and rising revenue, but the stock dropped after hours, down over 11% at times below yesterday's close. GameStop and Bed Bath and Beyond have a tendency to get lumped into certain baskets and follow similar price action. It wouldn't surprise us to see GME close negatively today. If that happens, it's ok. We're long term investors and are excited about what next week will bring.

What do we think is going to happen today? Well, it's hard to argue with trends. Although it seems like it would be a stretch for GME to close at $35 and BBBY to close at $5, recent history has shown us otherwise. Granted, we haven't been this far away from max pain going into a Friday trading session over the past few weeks so who knows!

Since Bed Bath and Beyond broke through the $500 million market cap yesterday, it was permitted to be discussed on the popular subreddit r/wallstreetbets which boasts 12.4 million "degenerates" in its community. Sentiment seems really high and people seem excited to get in on the action. It reminds us of GameStop in the early days.

GameStop was down around 3% and Bed Bath and Beyond was trading up around 4.5% in pre market.

Ryan Says

While we continue to wait on Ryan Cohen's next tweet, we'll leave you with another throw back:

Now we know Ryan is humble and this is absolutely not a true statement. We're excited to see him every time he makes an appearance. As of late, this has been solely on Twitter. He was a cute little thing though, don't you agree?

Have a great weekend and we'll be back on Monday morning!

Spread the Word

We love Ryan Cohen and think he's the greatest Activist Investor of our generation. We are passionate followers of his moves and words and would love for others to know more about this great leader. We feel strongly that life is all about learning who to follow. If you have someone that needs more RC in their life, share Mother Squeezer with them!

^ sneak peak at something that's in the works

Have something to share? Let us know!

Financial Disclaimer: None of this is meant to be financial advice. We love Ryan Cohen, RC Ventures, GameStop and Bed Bath and Beyond, and like learning and sharing these insights and commentary.