The Dude: It's like what Lenin said…you look for the person who will benefit, and, uh, uh... Donny: I am the walrus. The Dude: You know what I'm trying to say... Donny: I am the walrus. Walter Sobchak: Shut the fuck up, Donny! V.I. Lenin! Vladimir Illanich Uleninov! Donny:
What the fuck is he talking about, Dude? Hello again, GME Gang. What a fun day we had yesterday! Could it continue today? Only Melvin Capital (and maybe Ryan Cohen) knows!
And an extra special hello today to our newest WSB lookie-loo, Mr. Cramer (Can I call you Jim? I’m gonna call you Jim).
Now Jim, from what I’ve been able to gather, you and your Boomer stocks and your Hot Manic Takes don’t always get a lot of love around here. But that’s not
all your fault, Jim. The Paste-Eating Rocket Kids are often good for a solid meme (FYI: it’s pronounced “Mee-Mee.” Feel free to use that on air without verifying). But the Rocket Kids can be a dense bunch and they’re also often one click away from Total Financial Ruin (Quick shout out to SPCE: Pleas fly again). So you have to dig a bit in here to separate the wheat from the chaff, as someone like you actually says in real life. What the fuck even is chaff, Jim? And why do all Boomers seem to think that folksy farm-based idioms are the perfect way to conclude a thought?
Anyway. Those of us who watched your teevee clips last week where you reference your interest in WSB know that you, Jim Cramer, might be one of the Olds, but that you also Think Young(TM).
https://www.thestreet.com/jim-cramestock-market-advice-moderna-boeing-fed-ftc-dec-15. So we’re going to do our best to help your young-thinkin’ brain find the Needle In the Haystack here so you can get All Your Ducks In a Row on GME. Because we know that you’re a long way from being Put Out to Pasture, and though you may be an out-of-touch millionaire prone to facile yammering, we now
like you here, Jim—simply because you mentioned us and that made us blush a bit since we’re needy Millennials who just want our Boomer mommies and daddies to Tell Us They’re Proud of Us. So even though the Paste-Eating Rocket Kids here are often Buying A Pig in a Poke (Christ, please do not
ever say that or the kids’ Mee-Mees are gonna fuck you up), we appreciate you recognizing that, every now and then, there’s something worth paying attention to over in this weird little pocket of the Interwebs. And since you’re actually telling your loyal single-finger-typin’ viewers to check out this WSB shitshow, and “
if they’re running GME, then do some work on GME,” we assume you might actually be checking this shit out too, since all true Young Thinkers know that What’s Good for the Goose is Good for the Gander.
Now, is the GME play as solid as your recent recommendation to buy Bed Bath and Beyond? Who knows? That seems pretty stupid, and I would look it up myself this weekend but my nice little Saturday is already pretty full so I don’t know—I don’t know if I’ll have enough time. But I’ll tell you one thing: the GME play is
a lot more fucking fun. Life in a pandemic is boring, but here in this weird WSB place, these kids like fun. And for all your Boomer weirdness, you seem like you still like to have a little fun in this Mad, Mad world of ours. So consider joining us here more often. A word of warning, though: if you don’t like all the dern cuss words we use around here, Jim, well that’s just, like, your opinion man, and we’ll have you know that the Supreme Court has roundly rejected Prior Restraint.
First thing’s first: we have a bit of a bone to pick with you (now there
I go). The stuff you said last week about GME as the next Blockbuster was D-U-M dumb, Jim. You were a bit out of your fucking element with that. You even made our largest shareholder and conqueror-in-waiting, Mr. Ryan Cohen, send an emoji-only tweet in response, which if you know the super nice-guy Ryan Cohen like all of us do (we actually know nothing), that is pretty much the equivalent of him bringing his dog over to micturate on your and George Sherman’s rug.
Now, I myself have never been into the whole brevity thing, but I wanted to take this opportunity to get you up to speed on the GME movie you’ve wandered into. And I know you’re down with this because you told all your viewers that if WSB is talking about GME, then “make sure you know GME.” So before you say something Absolutely Mad again and Cohen sends a tweet with an even less ambiguous emoji, it’s high time that you start Making the Sure here, Jim. Just consider this to be CPT Hubbard delivering you some Orange Sunshine and turning you on to some of that Sweet, Delicious Non-Chaff Wheat you love so goddamn much.
Part 1: GME’s Bonkers-Ass Short Interest Now, I’m going to lead with the most crowd-pleasing part of the story here (Get ready, Rocket Kids!), and it’s the one that you did not even seem remotely familiar with in your “Stay out of GameStop, Deadbeat!” rant last week. Maybe that was by design or maybe not. We’ll return to that, Jim. But the point here is: the
short interest here is batshit insane. And not just your garden variety Boomer in Rolled Up Sleeves Ranting About Buying Estee Lauder While Hitting Buttons On The Beep-Bop-Boop Machine kind of insanity. Really and truly fucking nuts.
So to TL/DR this shit for you, Jim (to use the parlance of our times): GME is
the most shorted stock trading today—by far.
https://financhill.com/most-heavily-shorted-stocks-today How shorted? Well, the value of shares short exceeds the market cap of the company; there are currently
more shares short than the total number of shares outstanding. And when factoring in the institutional and insider ownership, the total short percentage of float is
nearly 300%.
https://www.gurufocus.com/term/FloatPercentageOfTSO/GME/Float-Percentage-Of-Total-Shares-Outstanding/GameStop-Corp Even higher, actually, now that Cohen’s interest is over 10%. Now, I’m not a numbers whiz like you, but that level of short interest and the small available float seems pretty fucked up to me. Like: “how is that even legal?” fucked up. And just for a frame of reference, the
third most shorted security right now is your beloved Bed Bath and Beyond, with a short percentage of float at a nice and tidy 69%.
Are you starting to gather why some of us in this weird little pocket of the Interwebs are a little excited about GME? You see, as
u/Jeffamazon and RodAlzmann
u/Uberkikz11 and others have explained in these here corners and on the twitter machine with their top-notch DD, and as I will translate to you in lingo you can dig, the short sellers got way over their skiis on this one expecting a bankruptcy in Spring of 2020 that never came. And yet, amazingly, the short interest has only
increased since then—there has effectively been no covering in the aggregate and, in fact, the short percentage has only
gone up. And now, on the threshold of 2021, we all sit atop a massive powder keg wondering what is going to be the thing that finally lights this shit up. And at the end of this little missive, I’m going to tell you what I think that thing might be (Spoiler: It’s Ryan Cohen! Better start getting used to seeing his name, Jim, because this dude does not fuck around and he’s not going anywhere).
https://www.reddit.com/wallstreetbets/comments/k4csaa/the_real_greatest_short_burn_of_the_century_part/ https://twitter.com/RodAlzmann https://thecollective.finance/2020/10/gamestop-gme-a-squeeze-to-44-from-14-can-be-justified-fundamentally-100-of-the-shares-are-short-watch-out/ Part 2: GameStop Isn’t Going Bankrupt and People Actually Want to Buy Shit There So, you foul mouthed little prick, a bonkers-ass short interest is neat and all, but why is Jim Cramer wrong when Jim Cramer compares GME to Blockbuster you might be asking yourself in the third person. First, the most obvious answer, Jim, which you should fucking know already: Blockbuster was
nearly $1 Billion in debt and missing debt payments left and right when it was delisted way back in 2010. That was also when there was a bit of a credit crunch, if you recall, right after that whole Housing Crash Unpleasantness that you saw coming from a mile away and from which you made hundreds of millions of dollars due to your contrarian foresight—I’m sorry, I’m clearly confusing you with Christian Bale starring as Dr. Michael Burry, weirdo head of Scion Asset Management, which also holds about 1.4M shares of GME (You really gotta start looking into this stuff, Jim. This story is made for TV, man—and you Boomers were raised by TV and you turned out TV!). Also, in 2010 when Netflix is ripping and when Blockbuster was about to be delisted and bankrupt, an analyst noted the obvious fact that Blockbuster had “nothing on the horizon that makes it look like Blockbuster is going to be more profitable.”
https://www.reuters.com/article/us-blockbusteblockbuster-wins-debt-reprieve-forced-to-delist-idUSTRE66052720100702 But Jim, if your Blockbuster comparison has any plausibility, GameStop must have a major debt problem then, right? And yet just last month GameStop
repaid $125M in debt several months ahead of time. It’s also really weird that over the past year management bought back a ton of shares, taking the OS from 102M
down to just under 70M (making a short squeeze even more likely, my Rocket Children). The weirdness continues with a soon-to-be-bankrupt company holding almost $500M in cash on hand. And according to George Sherman’s “Thine Omnichannel Shalt Be The Omni-est Channel of Them All” Conference Call following Q3, by March 2021 GME will have retired a total of $500M in debt and returned $200M to shareholders through stock buy backs. I’m no expert here, and I do not presently own a Beep-Bop-Boop Machine, but that’s all pretty weird shit to be doing if you’re about to go bankrupt.
No, no – I get it: who the fuck actually looks at balance sheets anyway before spouting off about what a stock is going to do? I sure as hell don’t. That’s why I follow my man
u/Uberkikz11, since that dude is a GME DD Encyclopedia and was born to crunch numbers. No, when Really Smart People make the Blockbuster comparison, it’s usually just Mouth Sounds for: A B&M Store That Used to Be Popular But Now Is Not Because Technology, QED. But here even the Really Smart People might be missing something as well. They’re right in the sense that GME must use this new console cycle window and cash influx to quickly pivot to a tech-first gaming company (more on that and our boy RC shortly!), but they’re wrong on the timing and relevance of this Super Smart Insight.
So fine, they’re doing ok on debt and cash. But who even goes to that 90s-Ass-Looking Cluttered Mall Geekery anymore anyways? I confess: in my darkest moments, as the short sellers manipulate the fuck out of this stock and I curse the names Bell and Sherman, I too have wondered this. But it turns out that, just like I have no idea why anyone listens to Maroon 5 or eats at Applebee’s, apparently a lot of people in America do shit that I do not. Crazy huh? So here is some pretty neat data showing us how out of touch we might be here, Jim:
First, when a pretty large sample size of people were recently asked the question:
which of the following stores or websites do you plan to buy holiday gifts from? The
#5 response from United States Americans was none other than
GameStop (Ticker, Jim: GME). Only Walmart, Amazon, Target, and Dollar Store (poor people buy gifts too, Jim) were ahead of little old GameStop. That’s higher than Nike, Macy’s, the Apple Store—and
double the response of Bed Bath and Fucking Beyond in every category they surveyed. Check it: (h/t to my man
u/snowk88)
https://stocktwits.com/snowk88/message/260983915 That’s kinda crazy huh? See Jim, when you Think Young(TM), you really can learn something new every day. And by following our man
u/snowk88 (@snowk88 over at stocktwits), I learn lots of cool shit. But guess who already knew that? The guy that wrote this bad-ass letter that identifies GME’s brand and customer data as being one of the most valuable things GME has going for it.
https://s.wsj.net/public/resources/documents/RC_Ventures_Letter_to_GameStop.pdf So now we know that Real Life People actually buy shit at GameStop here in the year of our lord 2020. But like that analyst from 2010 said about Blockbuster, there must not be anything on the horizon for GameStop to be more profitable in 2021, right?
Now, I will admit that being a bit bearish on GME in December of 2020 would make more sense if, say, GameStop were the nation’s largest purveyor of limp and half-lit pumpkin spice-scented candles and we were exiting the apogee of Shitty Candle Season. But as it turns out, GameStop is currently selling basically the most sought-after items that exist in the marketplace right now—where demand for the Xbox and Ps5 is far outpacing supply and is projected to continue well into 2021.
https://www.gamesindustry.biz/articles/2020-11-17-microsoft-expects-xbox-series-x-s-shortages-until-q2-2021 I don’t really need to get into the details on that here, because it’s pretty goddamn obvious, but I think 2020 GameStop at the precipice of a new console cycle might be in a bit of a better position than, say, 2010 Blockbuster relying on the latest Adam Sandler release to lift its sagging rental numbers. But I don’t know. Millions of people don’t watch
my show looking for Candid Analysis from me and
my folksy man-of-the-people-lookin’ rolled-up sleeves.
Part 3: Ryan Cohen is the Sword of Damocles Hanging Over the Short Sellers’ Dumbass Heads And now we’ve gotten to the best part. It’s my favorite part of all of this, Jim, and if you give this a little time, I think it will be yours too. You see, all that corporate bla bla bla about balance sheets and console cycles and early debt repayment and overleveraged short sellers and brand recognition is neat and all—and definitely worth a second look by itself. Maybe even a little Beep-Bop-Boop on the ol’ sound machine—I don’t know your methods. But the real thing that’s about to rip all our faces off here is the business and investment decisions of a mild-mannered wunderkind named Ryan Cohen.
Now you can revisit my prior epistle if you want to know a bit more about the involvement of Mr. Ryan Cohen in
Le Affair GameStop.
https://www.reddit.com/wallstreetbets/comments/kakxrm/gme_tribe_a_story_about_how_ryan_cohen_is_about/. My fly-by-night theory of his lawyer’s possible use of the consent solicitation could have probably marinated for another day, but the thrust of my argument there was that Cohen and his attorney have been laying the groundwork to come after GameStop for a while now. And that Cohen was likely emboldened by the humiliating, lame-ass CC performance by some dude with a mid-century comic-strip sounding name that we’ll all soon know only as: The Guy With the Punchable Face Who Used to Be CEO of GameStop.
But here is where things get really interesting. This is a story in the making, Jim, for fucks sake - take notes! This Monday, on December 21, Mr. Ryan Cohen filed a revised 13D showing that last week he started buying a shit-ton of shares—starting on Tuesday December 15th—which is
the day after the stock price inexplicably plunged on Monday the 14th and the very same day you were yammering on the teevee about GME being Blockbuster! Instead of listening to you, however, Cohen started buying more GME shares (super-sleuth dark pool watchers
u/rgrAi and
u/snowk88 noticed in real-time that there was some very large accumulation taking place), which culminated in the big reveal that Cohen purchased a total of 2,501,000 additional shares last week—500,000 of which were purchased on Friday December 18, 2020
at the price of $16.02 a share. Ryan Cohen is still the single largest shareholder of GME with 9,001,000 shares in total, taking his ownership of GME above the 10% threshold from 9.98% to 12.9%. And so he apparently thinks that the floor for his investment is $16.02 per share. Is he still buying? We’ll know soon. But yesterday seemed like a little taste of what it might look like if a large buyer steps in to prevent short sellers from manipulating all of my nervous little Rocket Children here and their delicate little paper hands.
There was another thing we learned from this 13D filing: Ryan Cohen has apparently hired a new attorney and law firm. Instead of the great Christopher Davis of Kline Kaplan, now Ryan Cohen is represented by Ryan P. Nebel, a partner with Olshan Frome Wolosky, LLP. Now, if you’re familiar with my prior ramblings, you might wonder if I was a bit confused, and maybe even a little sad, at this sudden change from my man C. Davis. And you might be a little right. But then the wonder of the internet allowed me to learn a bit about these new lawyers. And holy shit, things are about to get fun.
Now, I liked what I knew about Chris Davis and he seems like a genuine bad ass activist attorney. But the folks at Olshan Frome and Wolosky, LLP are Next Level Players and really seem tailor-made for this exact situation. First off, Olshan is ranked as
the top global lawfirm for Activist Attorneys.
https://www.olshanlaw.com/assets/htmldocuments/Bloomberg%20Activism%20League%20Tables%20H12020.pdf (H/t @flummoxed at stocktwits). They seem to be the go-to law firm for major proxy battles initiated by activist investors. But possibly even more important is that Olshan is the
same firm that represented Hestia and Permit in their successful proxy battle earlier this year to appoint two new directors to the GME Board. I’m not going into the fine details of that, because this is already a bit of a long-form Idiot’s New Yorker article, but GameStop just went through a proxy fight last year with Activist Investors Hestia Capital and Permit Capital, which resulted in two Board seats for our shareholder buds from Hestia and Permit. So, it’s reasonable to assume that the attorneys at Olshan might know their way around GameStop at this point and where the pressure points are here.
http://www.globallegalchronicle.com/hestia-capital-and-permit-capitals-two-new-directors-to-the-gamestop-board/ https://www.olshanlaw.com/resources-mentions-HestiaCapital-PermitCapital-GameStop-BoardofDirectors-ShareholderActivism.html And if you follow
u/snowk88 over at stocktwits (@snowk88)— you’d also find a wealth of DD on how Olshan rolls when entering these activist-investor-replaces-dumbass-boards-and-CEOs type disputes. To bottom line it:
they get it fucking done.
https://stocktwits.com/snowk88/message/266158534 https://stocktwits.com/snowk88/message/266155112 https://stocktwits.com/snowk88/message/266153175 But what else did we learn from the 13D? We learned that Ryan Cohen is definitely not going anywhere any time soon. Specifically, the filing notes that RC Ventures intends to continue to engage in discussions with GameStop’s board
“regarding means to drive stockholder value, including through changes to the composition of the board and other corporate governance enhancements." And while RC Ventures
“desires to come to an amicable resolution with [GameStop, it] will not hesitate to take any actions that it believes are necessary to protect the best interests of all stockholders.” I really like that last part, don’t you? And although I thought his November 16th letter was pretty goddamn clear, this 13D just ratcheted up the transparency level here. In sum, Ryan Cohen has all of our backs and he’s going to replace this Board and Sherman with people that are on the level and that will help implement his vision.
And now seems like a good time to return to those “Ryan Cohen: Boy Genius” articles that were definitely NOT part of a well-coordinated pre-hostile takeover media campaign initiated earlier this year. I think there might be a few things in those articles that Mr. Cohen wanted all of us shareholders (as well as the short sellers and the Board he’s about to replace) to really and truly understand. Recall also that Cohen is not one for diversification or for playing it safe. So here’s a few choice nuggets for you to ponder:
***
Bloomberg, June 2020:
https://www.bloomberg.com/news/articles/2020-06-05/chewy-founder-cashes-out-bets-on-apple-wells-fargo · "It's too hard to find, at least for me, what I consider great ideas," he says. "When I find things I have a lot of conviction in, I go all-in."
· Cohen uses the word “conviction” a lot. He says it’s something he learned from his father, who ran a glassware importing business in Montreal where Cohen grew up. “He taught me how to block the noise from the masses,” says Cohen. “To have a point of view and have conviction and not waver.”
· He wouldn’t, however, recommend his [non-diversified] investment approach to everyone. “You need to have the temperament to block the noise,” he says. “Sometimes it feels like a roller coaster.”
· He likens his obsessive focus on building Chewy to his approach to stock picking. "I don't want to swing for a single," he says.
***
You hear that, Jim? Our man Cohen likes idioms too! But fuck those farm idioms, Jim – we’re upgrading to the Sportsball kind now. So what’s the takeaway here? I’d say that Cohen has his Eye On The Ball and that it’s time for all short sellers and the Board to Throw in The Towel because Ryan Goddamn Cohen likes to Take the Bull By The Horns and will ensure that he Hits a Homerun for shareholders that believe in his vision.
Here’s a few more things Mr. Cohen wants all of us to know:
***
Forbes, August 2020:
https://www.forbes.com/sites/zackfriedman/2020/08/16/entrepreneur-chewy-founder-ryan-cohen-shares-his-best-advice/?sh=41e1370e5840 · “For me, each no sounded like they just didn’t understand my vision. It was frustrating at times, but never discouraging. Those ‘no’s never made me doubt my strategy – it was the opposite. I was motivated by all the rejections and they just got me fired up.”
· “I understood that thinking big was likely going to be misunderstood along the way. I’m contrarian by nature, so being misunderstood often validates what I’m doing. It wasn’t until Chewy boxes were on doorsteps across the country that the bulk of investors started to recognize our formula.”
· “[M]y biggest risk would have been not taking risk. The risk of going head-to-head against Amazon. The risk of insourcing fulfillment. The risk of building a company in Florida rather than a popular tech hub. The risk of spending $3 million a month on TV ads, more than Home Depot HD -0.1%'s budget. The risk of hiring expensive executives even though we weren’t profitable. These decisions were some of the most controversial and required me being comfortable betting against conventional wisdom, and were often contrary to the advice of my board. Suffice it to say, I was not the most popular board member.”
· “Dad never swayed when he believed in something. I never compromised my vision, regardless how many investors turned me down I was not going to give up on building Chewy into the world’s biggest online pet retailer. I love to be challenged, and I’m flexible on details, but I’m never willing to give up.”
***
Goddamn it, Ryan. I was done having children but now you’ve forced me into getting back on that train just so I can name this future child Ryan Fucking Cohen. Thanks a lot, asshole.
But to return to my point: are those the statements of a man that seems likely to walk away at this point? Or is Cohen trying to tell us all to get ready because he is going
All In on this shit?
So where does this leave us? After a huge week where Cohen buys 2.5M more shares and then the SP skyrockets to $20 yesterday on that news? Well, this is where I want to tip my cap to my man Justin Dopierala over at Seeking Alpha and allow him to conclude this section. He, along with his pal Dmitriy Kozin have been pretty clear-eyed on all this shit for a while now and they both deserve some credit. And I know I gave my main man Justin a bit of a hard time in my last novella, but the dude is sharp as hell and helped a lot of us see the forest through the trees here. And you should also definitely invite him to join your poker nights (seriously: check out the dude’s tweet in response to our own Rod Alzmann’s introduction of the #WeWantCohen hashtag right after the Q3 call debacle).
https://twitter.com/DOMOCAPITAL/status/1336446055685230592. You have no comment on a potential takeover involving Ryan Cohen, Justin after your hour-long googly-eyed call together? Can’t believe you’re just preemptively leaving the WSJ and Bloomberg hanging like that. Justin, I love you dude, but if I’m holding pocket Kings I’m folding after that tweet because that twinkle in your eye lets me know you’re about to drop two Aces on my ass.
Anyway. Here is what our man Dopierala thinks might happen here soon (and he called this way back on November 17th- and sorry - no links here, per the mods, as apparently no Alpha must ever be Sought from these parts):
I think a very likely outcome at this point is a majority slate next shareholder meeting where Cohen takes over BOD and then makes himself CEO. A majority slate proxy battle would require all institutions to call in shares and would force a squeeze. We’re intrigued, Justin. Please continue:
If Ryan Cohen successfully negotiates a purchase price with the Board then the shareholders will have to vote on it. Unlike the proxy battle where Hestia and Permit were running a minority slate of directors, an offer to purchase GameStop would force institutions like Vanguard and Blackrock to call in their shares. By doing so, the shorts would be forced to close out their positions and GameStop would finally have the greatest short squeeze of all-time. Ironically, Cohen could use this opportunity to sell all of his shares and use the proceeds to entirely fund the acquisition of GameStop going down as the first person in history to acquire a billion dollar company... for absolutely nothing. In fact, his acquisition price would be less than zero. And now is when I get to speculate on what I think is going to happen here. But I do not necessarily think Cohen is going to put an offer to buy GME to take private. That would definitely trigger a MOASS, but I’m not sure I see it given the attorneys he’s hired and his recent buys up to $16 and the amount of cash that would take. Like Dopierala’s
first comment, though, I think Cohen is going to nominate directors to replace nearly the entire Board of Directors with a vote happening at the annual meeting and once that Board is in place, they’ll appoint Cohen as CEO. And as Justin notes, if he nominates a majority slate of directors, shares will have to be called in to vote. And this vote and proxy battle will make the prior minority slate Hesita/Permit battle, and the tiny short squeeze that took place when that happened, look tame by comparison.
Now everyone: get your calendars out. Because the date to nominate directors here is in
Mid-March, and my super-smart corporate lawyer buds inform me that it’s standard practice to file about 7-10 days prior. So, if this actually happening, we should be seeing something on this by
early March.
But even though early March is now the mark on the wall, today’s insane price action caused me to think about all of this a bit harder and speculate a bit more. And a major h/t to my buds on the stocktwits board, especially
u/rgrAi (@amarbar) for all the sharp analysis on this. But if you were Ryan Cohen and you knew this company was hugely undervalued and you had a high level of
CONVICTION here and also knew you needed shareholder votes to sweep out these dumbasses and implement your vision—then how would you play this with the short interest here as crazy as it is? I’d keep buying. Why? Well, lots of reasons, you smart alecks.
First, so I have more guaranteed votes (duh?). Second, so that when the building starts burning and short hedge funds run for the exits they find that a mild-mannered Millennial with super-good ideas has sealed off all the doors and windows. That’s gruesomely delicious, isn’t it? Why else, CPT? Well, finally, and maybe most importantly, because I would want to excite and delight all my fellow shareholders by triggering a slow-burn short squeeze, raising the SP significantly, so that I can once again make the point (as he did in the Nov 16 letter) that the incompetent management that caused a
HUGE drop in SP following that utterly incompetent Q3 call and the shelf registration, had
nothing to do with the SP increase that again happened once Cohen announced his intent and started buying. Not the console cycle, not the cost containment measures, not the buybacks and not the early debt reduction. Nope: rightly or wrongly, shareholders will see Ryan Cohen buying shares and the corresponding SP increase and everyone—especially all new buyers who are delighted at their good fortune and swept up by Ryan Cohen Fever 2021—will start getting #WeWantCohen tattoos on their ass they’ll be so happy. And all of us, newly enriched by Ryan Cohen’s Big Canadian Balls and tactical brilliance, will crawl over glass to vote for him over The Boomer Artist Formally Known As GameStop’s CEO. I could be very wrong on this last point in particular, but if we start seeing 13Ds drop here shortly, things should get very fun very quickly.
Part 4: A Return to Our Short-Squeeze-to-Da-Moon Discussion: Who’s Side Are You Fucking On, Jim? Now, Jim, given the fast friendship we’re creating here, and all we’ve been through over the past 5000 words, I hesitate in bringing this up. But we’ve all seen the video, Jim. You know the one I’m talking about. Yes, the one where you actually tell the truth about how short selling hedge funds manipulate the market to knock down the price of perfectly good securities that many hard-working people
invest in—many normal-ass people all assuming they wont ever have to Point Where On The Dolly The Invisible Hand of the Economy Touched Them. But that’s not life now is it Jim? And fuck those poor-ass rubes for not knowing how to play the game with you sophisticated Masters of the Universe,
amirite?
https://www.reddit.com/dashpay/comments/93evx4/jim_cramer_reveals_dirty_tricks_short_sellers_use/ https://dealbook.nytimes.com/2007/03/20/cramer-market-manipulato So where are
you in this whole GME/Cohen story, Jim? You candidly (gleefully?) acknowledge that a prime strategy that shorts deploy is to spread negative rumors that are then amplified by Big Smart Trustworthy Financial Media Titans like yourself to shake out unsophisticated retail players like my Rocket Kids here—who because of their tiny paper hands and you mean short selling brutes often subsist on paste and paste alone.
So for this particular security, are you the one helping with the manipulation and actively creating the “new truth” or are you just one of the Useful Idiots that these short sellers use to manipulate with an anodyne, TV media-ready comparison like:
GameStop Is The Next Blockbuster? And how in the fuck does this fit into your Think Young(TM) project, Jim? Because if there is one thing that we over at WSB fucking hate, it’s a bunch of Manipulative Short Selling Boomer Fuckwads. Why on earth would a hip Young Thinker like you want to be included in that crew, Jim?
And I know we’re all friends here now, Jim, but I need to push back a bit on some of what you said in that video in such a cavalier whatareyagonnado manner. So if I understand you, short and distort and fomenting negative reactions from retail players based on deliberately false narratives is
illegal, but still easy as fuck to do "because the SEC doesn't understand it." But you fucking do understand it, Jim! So why are you helping those short and distorters break the law here? Why are you being such an obtuse dumbshit? Just check out what happens to the borrow rate and short selling every time there is any good news for GME:
https://stocktwits.com/Slantedangles/message/264519950 (h/t @slantedangles). This manipulation isn't just happening with GME; it is happening
everywhere. It’s baked into the cake. And that is pretty fucked up that we all just accept it because
whatareyagonnado.
I think that one thing that those of us who truly do Think Young(TM) have a hard time understanding is at what point in your lives do you Boomers all finally come to realize that it’s maybe time to stop playing the game like you have been? What point do you finally have enough where doing the right thing matters more than getting paid? Maybe start by telling the truth more often—and maybe don’t go out of your way to help those corrupt-ass hedge fund managers who continually fuck over average people
merely because they were stupid enough to believe you all. What contempt you Masters of the Universe have for all of them—for all of
us. There is a bigger story here on GME and this out-of-control short interest (naked shorting, counterfeit shares)
http://counterfeitingstock.com/CS2.0/CounterfeitingStock.html than even Ryan Cohen and the inevitable short squeeze we’re about to witness here. And it begins and ends with people like you and Melvin Capital and Bank of America not giving a fuck about the rules while thinking you’re smarter than the rest of us who do—but who lack power to do anything about it. And you know what? Maybe you
are smarter than us. You certainly know how to play this game pretty well, as that video shows. But if I know my old school 1980s movies like I think I do, this is usually the part of the story where the rag-tag kids from across the tracks come over to show you hubristic rich fuckheads what happens when you fuck a stranger in the ass.
Now I myself have never dabbled in pacifism, Jim, so this isn’t too much of a stretch for me, but seeing that video of yours and seeing the insane short interest and all the manipulation here makes me want to burn the whole corrupt system to the ground—while barricading the doors to trap in those arrogant-ass short sellers who lie and cheat and distort to profit off average people. And though I’m certain that this larger battle is not driving him, maybe that result is one that Ryan Cohen wouldn’t mind too. Though he’s a polite Canadian and would probably just let everyone know that he’s not really mad, just disappointed. But me? I’m an Angry American and I say: Block the fucking doors and windows and light that shit up.
So maybe this epistle will be useful for your Think Young(TM) project and cause you to reflect a bit more on what’s really going on out there with this whole GME thing and the likely illegal shorting that has driven the short percentage of float to these insane levels, drawing in new retail shorts too stupid to know what’s even happening. Or maybe it wont cause you to reflect in the slightest (count me as one of those cynical types that see your overtures to WSB as a transparent play for greater market share from the Young Crowd since your old-ass audience is dying and/or switching to bonds). But in a few months when all the Billy Ray Valentines and Louis Winthorpes assembled here are toasting each other in stupid shirts on a white-sand beach somewhere, we do not want you to look back on your knee-jerk boomer-ass dismissal of GME and your Useful Idiot blathering with that same tinge of regret and longing you feel when you look at a pre-Client 9 picture of you and your old roomie: warm-toes-and-hosiery-enthusiast E. Spitzer, Esq.
In conclusion: GME = Blockbuster comparisons are for Simps and Corrupt Short-and-Distorters. Don’t be like them, Jim. And to my Rocket Children: the only weapon we wield in this stupid game is Diamond Hands with a float like this. Toughen the fuck up.
And Happy Holidays everyone.
--CPT Hubbard
TL/DR: Jim Cramer likes farm-based idioms and apparently being a useful idiot to scummy short selling hedge funds. DD on the GME turnaround is solid and overleveraged short sellers should be shitting themselves. Ryan Cohen, our polite, hard-working Canadian benefactor is about to rip all our fucking faces off and trigger a MOASS. Probably even by early March, if that time is good for you (he’ll text before he comes). And fuck infinite regress: It’s rockets all the way down here.
🚀🚀🚀 Now: diamond hands, motherfuckers.
**This is a shitpost and is only to be used as investment and life advice for Mr. Jim Cramer, Esq.
submitted by NEW INFO 5 Results from share redemption are posted. Less than .2% redeemed. Very bullish as investors are showing extreme confidence in the future of PLBY.
https://finance.yahoo.com/news/playboy-mountain-crest-acquisition-corp-120000721.html NEW INFO 4 Definitive Agreement to purchase 100% of Lovers brand stores announced 2/1.
https://www.streetinsider.com/Corporate+News/Playboy+%28MCAC%29+Confirms+Deal+to+Acquire+Lovers/17892359.html NEW INFO 3 I bought more on the dip today. 5081 total. Price rose AH to $12.38 (2.15%)
NEW INFO 2 Here is the full webinar.
https://icrinc.zoom.us/rec/play/9GWKdmOYumjWfZuufW3QXpe_FW_g--qeNbg6PnTjTMbnNTgLmCbWjeRFpQga1iPc-elpGap8dnDv8Zww.yD7DjUwuPmapeEdP?continueMode=true&tk=lEYc4F_FkKlgsmCIs6w0gtGHT2kbgVGbUju3cIRBSjk.DQIAAAAV8NK49xZWdldRM2xNSFNQcTBmcE00UzM3bXh3AAAAAAAAAAAAAAAAAAAAAAAAAAAA&uuid=WN_GKWqbHkeSyuWetJmLFkj4g&_x_zm_rtaid=kR45-uuqRE-L65AxLjpbQw.1611967079119.2c054e3d3f8d8e63339273d9175939ed&_x_zm_rhtaid=866 NEW INFO 1 Live merger webinar with PLBY and MCAC on Friday January 29, 2021 at 12:00 NOON EST link below
https://mcacquisition.com/investor-relations/press-release-details/2021/Playboy-Enterprises-Inc.-and-Mountain-Crest-Acquisition-Corp-Participate-in-SPACInsider-ICR-Webinar-on-January-29th-at-12pm-ET/default.aspx Playboy going public: Porn, Gambling, and Cannabis !!!WARNING READING AHEAD!!! TL;DR at the end. It will take some time to sort through all the links and read/watch everything, but you should.
In the next couple weeks, Mountain Crest Acquisition Corp is taking Playboy public. The existing ticker MCAC will become PLBY. Special purpose acquisition companies have taken private companies public in recent months with great success. I believe this will be no exception. Notably, Playboy is profitable and has skyrocketing revenue going into a transformational growth phase.
Porn - First and foremost, let's talk about porn. I know what you guys are thinking. “Porno mags are dead. Why would I want to invest in something like that? I can get porn for free online.” Guess what? You are absolutely right. And that’s exactly why Playboy doesn’t do that anymore. That’s right, they eliminated their print division. And yet they somehow STILL make money from porn that people (see: boomers) pay for on their website through PlayboyTV, Playboy Plus, and iPlayboy. Here’s the thing: Playboy has international, multi-generational name recognition from porn. They have content available in 180 countries. It will be the only publicly traded adult entertainment (porn) company. But that is not where this company is going. It will help support them along the way. You can see every Playboy magazine through iPlayboy if you’re interested. NSFW links below:
https://www.playboy.com/ https://www.playboytv.com/ https://www.playboyplus.com/ https://www.iplayboy.com/ Gambling - Some of you might recognize the Playboy brand from gambling trips to places like Las Vegas, Atlantic City, Cancun, London or Macau. They’ve been in the gambling biz for decades through their casinos, clubs, and licensed gaming products. They see the writing on the wall. COVID is accelerating the transition to digital, application based GAMBLING. That’s right. What we are doing on Robinhood with risky options is gambling, and the only reason regulators might give a shit anymore is because we are making too much money. There may be some restrictions put in place, but gambling from your phone on your couch is not going anywhere. More and more states are allowing things like Draftkings, poker, state ‘lottery” apps, hell - even political betting. Michigan and Virginia just ok’d gambling apps. They won’t be the last. This is all from your couch and any 18 year old with a cracked iphone can access it. Wouldn’t it be cool if Playboy was going to do something like that? They’re already working on it. As per CEO Ben Kohn who we will get to later, “...the company’s casino-style digital gaming products with Scientific Games and Microgaming continue to see significant global growth.” Honestly, I stopped researching Scientific Games' sports betting segment when I saw the word ‘omni-channel’. That told me all I needed to know about it’s success.
“Our SG Sports™ platform is an enhanced, omni-channel solution for online, self-service and retail fixed odds sports betting – from soccer to tennis, basketball, football, baseball, hockey, motor sports, racing and more.”
https://www.scientificgames.com/ https://www.microgaming.co.uk/ “This latter segment has become increasingly enticing for Playboy, and it said last week that it is considering new tie-ups that could include gaming operators like PointsBet and 888Holdings.”
https://calvinayre.com/2020/10/05/business/playboys-gaming-ops-could-get-a-boost-from-spac-purchase/ As per their SEC filing:
“Significant consumer engagement and spend with Playboy-branded gaming properties around the world, including with leading partners such as Microgaming, Scientific Games, and Caesar’s Entertainment, steers our investment in digital gaming, sports betting and other digital offerings to further support our commercial strategy to expand consumer spend with minimal marginal cost, and gain consumer data to inform go-to-market plans across categories.”
https://www.sec.gov/Archives/edgadata/1803914/000110465921005986/tm2034213-12_defm14a.htm#tMDAA1 They are expanding into more areas of gaming/gambling, working with international players in the digital gaming/gambling arena, and a Playboy sportsbook is on the horizon.
https://www.playboy.com/read/the-pleasure-of-playing-with-yourself-mobile-gaming-in-the-covid-era Cannabis - If you’ve ever read through a Playboy magazine, you know they’ve had a positive relationship with cannabis for many years. As of September 2020, Playboy has made a major shift into the cannabis space. Too good to be true you say? Check their website. Playboy currently sells a range of CBD products. This is a good sign. Federal hemp products, which these most likely are, can be mailed across state lines and most importantly for a company like Playboy, can operate through a traditional banking institution. CBD products are usually the first step towards the cannabis space for large companies. Playboy didn’t make these products themselves meaning they are working with a processor in the cannabis industry. Another good sign for future expansion. What else do they have for sale? Pipes, grinders, ashtrays, rolling trays, joint holders. Hmm. Ok. So it looks like they want to sell some shit. They probably don’t have an active interest in cannabis right? Think again:
https://www.forbes.com/sites/javierhasse/2020/09/24/playboy-gets-serious-about-cannabis-law-reform-advocacy-with-new-partnership-grants/?sh=62f044a65cea “Taking yet another step into the cannabis space, Playboy will be announcing later on Thursday (September, 2020) that it is launching a cannabis law reform and advocacy campaign in partnership with National Organization for the Reform of Marijuana Laws (NORML), Last Prisoner Project, Marijuana Policy Project, the Veterans Cannabis Project, and the Eaze Momentum Program.”
“According to information procured exclusively, the three-pronged campaign will focus on calling for federal legalization. The program also includes the creation of a mentorship plan, through which the Playboy Foundation will support entrepreneurs from groups that are underrepresented in the industry.” Remember that CEO Kohn from earlier? He wrote this recently:
https://medium.com/naked-open-letters-from-playboy/congress-must-pass-the-more-act-c867c35239ae Seems like he really wants weed to be legal? Hmm wonder why? The writing's on the wall my friends. Playboy wants into the cannabis industry, they are making steps towards this end, and we have favorable conditions for legislative progress.
Don’t think branding your own cannabis line is profitable or worthwhile? Tell me why these 41 celebrity millionaires and billionaires are dummies. I’ll wait.
https://www.celebstoner.com/news/celebstoner-news/2019/07/12/top-celebrity-cannabis-brands/ Confirmation: I hear you. “This all seems pretty speculative. It would be wildly profitable if they pull this shift off. But how do we really know?” Watch this whole video:
https://finance.yahoo.com/video/playboy-ceo-telling-story-female-154907068.html Man - this interview just gets my juices flowing. And highlights one of my favorite reasons for this play. They have so many different business avenues from which a catalyst could appear. I think paying attention, holding shares, and options on these staggered announcements over the next year is the way I am going to go about it. "There's definitely been a shift to direct-to-consumer," he (Kohn) said. "About 50 percent of our revenue today is direct-to-consumer, and that will continue to grow going forward.” “Kohn touted Playboy's portfolio of both digital and consumer products, with casino-style gaming, in particular, serving a crucial role under the company's new business model. Playboy also has its sights on the emerging cannabis market, from CBD products to marijuana products geared toward sexual health and pleasure.” "If THC does become legal in the United States, we have developed certain strains to enhance your sex life that we will launch," Kohn said.
https://cheddar.com/media/playboy-goes-public-health-gaming-lifestyle-focus Oh? The CEO actually said it? Ok then. “We have developed certain strains…” They’re already working with growers on strains and genetics? Ok. There are several legal cannabis markets for those products right now, international and stateside. I expect Playboy licensed hemp and THC pre-rolls by EOY. Something like this:
https://www.etsy.com/listing/842996758/10-playboy-pre-roll-tubes-limited?ga_order=most_relevant&ga_search_type=all&ga_view_type=gallery&ga_search_query=pre+roll+playboy&ref=sr_gallery-1-2&organic_search_click=1 Maintaining cannabis operations can be costly and a regulatory headache. Playboy’s licensing strategy allows them to pick successful, established partners and sidestep traditional barriers to entry. You know what I like about these new markets? They’re expanding. Worldwide. And they are going to be a bigger deal than they already are with or without Playboy. Who thinks weed and gambling are going away? Too many people like that stuff. These are easy markets. And Playboy is early enough to carve out their spot in each. Fuck it, read this too:
https://www.forbes.com/sites/jimosman/2020/10/20/playboy-could-be-the-king-of-spacs-here-are-three-picks/?sh=2e13dcaa3e05 Numbers: You want numbers? I got numbers. As per the company’s most recent SEC filing:
“For the year ended December 31, 2019, and the nine months ended September 30, 2020, Playboy’s historical consolidated revenue was $78.1 million and $101.3 million, respectively, historical consolidated net income (loss) was $(23.6) million and $(4.8) million, respectively, and Adjusted EBITDA was $13.1 million and $21.8 million, respectively.”
“In the nine months ended September 30, 2020, Playboy’s Licensing segment contributed $44.2 million in revenue and $31.1 million in net income.”
“In the ninth months ended September 30, 2020, Playboy’s Direct-to-Consumer segment contributed $40.2 million in revenue and net income of $0.1 million.”
“In the nine months ended September 30, 2020, Playboy’s Digital Subscriptions and Content segment contributed $15.4 million in revenue and net income of $7.4 million.”
They are profitable across all three of their current business segments.
“Playboy’s return to the public markets presents a transformed, streamlined and high-growth business. The Company has over $400 million in cash flows contracted through 2029, sexual wellness products available for sale online and in over 10,000 major retail stores in the US, and a growing variety of clothing and branded lifestyle and digital gaming products.”
https://www.sec.gov/Archives/edgadata/1803914/000110465921005986/tm2034213-12_defm14a.htm#tSHCF Growth: Playboy has massive growth in China and massive growth potential in India. “In China, where Playboy has spent more than 25 years building its business, our licensees have an enormous footprint of nearly 2,500 brick and mortar stores and 1,000 ecommerce stores selling high quality, Playboy-branded men’s casual wear, shoes/footwear, sleepwear, swimwear, formal suits, leather & non-leather goods, sweaters, active wear, and accessories. We have achieved significant growth in China licensing revenues over the past several years in partnership with strong licensees and high-quality manufacturers, and we are planning for increased growth through updates to our men’s fashion lines and expansion into adjacent categories in men’s skincare and grooming, sexual wellness, and women’s fashion, a category where recent launches have been well received.” The men’s market in China is about the same size as the entire population of the United States and European Union combined. Playboy is a leading brand in this market. They are expanding into the women’s market too. Did you know CBD toothpaste is huge in China? China loves CBD products and has hemp fields that dwarf those in the US. If Playboy expands their CBD line China it will be huge. Did you know the gambling money in Macau absolutely puts Las Vegas to shame? Technically, it's illegal on the mainland, but in reality, there is a lot of gambling going on in China.
https://www.forbes.com/sites/javierhasse/2020/10/19/magic-johnson-and-uncle-buds-cbd-brand-enter-china-via-tmall-partnership/?sh=271776ca411e “In India, Playboy today has a presence through select apparel licensees and hospitality establishments. Consumer research suggests significant growth opportunities in the territory with Playboy’s brand and categories of focus.” “Playboy Enterprises has announced the expansion of its global consumer products business into India as part of a partnership with Jay Jay Iconic Brands, a leading fashion and lifestyle Company in India.” “The Indian market today is dominated by consumers under the age of 35, who represent more than 65 percent of the country’s total population and are driving India’s significant online shopping growth. The Playboy brand’s core values of playfulness and exploration resonate strongly with the expressed desires of today’s younger millennial consumers. For us, Playboy was the perfect fit.” “The Playboy international portfolio has been flourishing for more than 25 years in several South Asian markets such as China and Japan. In particular, it has strategically targeted the millennial and gen-Z audiences across categories such as apparel, footwear, home textiles, eyewear and watches.”
https://www.licenseglobal.com/industry-news/playboy-expands-global-footprint-india It looks like they gave COVID the heisman in terms of net damage sustained: “Although Playboy has not suffered any material adverse consequences to date from the COVID-19 pandemic, the business has been impacted both negatively and positively. The remote working and stay-at-home orders resulted in the closure of the London Playboy Club and retail stores of Playboy’s licensees, decreasing licensing revenues in the second quarter, as well as causing supply chain disruption and less efficient product development thereby slowing the launch of new products. However, these negative impacts were offset by an increase in Yandy’s direct-to-consumer sales, which have benefited in part from overall increases in online retail sales so far during the pandemic.” Looks like the positives are long term (Yandy acquisition) and the negatives are temporary (stay-at-home orders).
https://www.sec.gov/Archives/edgadata/1803914/000110465921006093/tm213766-1_defa14a.htm This speaks to their ability to maintain a financially solvent company throughout the transition phase to the aforementioned areas. They’d say some fancy shit like “expanded business model to encompass four key revenue streams: Sexual Wellness, Style & Apparel, Gaming & Lifestyle, and Beauty & Grooming.” I hear “we’re just biding our time with these trinkets until those dollar dollar bill y’all markets are fully up and running.” But the truth is these existing revenue streams are profitable, scalable, and rapidly expanding Playboy’s e-commerce segment around the world.
"Even in the face of COVID this year, we've been able to grow EBITDA over 100 percent and revenue over 68 percent, and I expect that to accelerate going into 2021," he said. “Playboy is accelerating its growth in company-owned and branded consumer products in attractive and expanding markets in which it has a proven history of brand affinity and consumer spend.”
Also in the SEC filing, the
Time Frame:
“As we detailed in the definitive proxy statement, the SPAC stockholder meeting to vote on the transaction has been set for February 9th, and, subject to stockholder approval and satisfaction of the other closing conditions, we expect to complete the merger and begin trading on NASDAQ under ticker PLBY shortly thereafter,” concluded Kohn.
The Players: Suhail “The Whale” Rizvi (HMFIC), Ben “The Bridge” Kohn (CEO), “lil” Suying Liu & “Big” Dong Liu (Young-gun China gang). I encourage you to look these folks up. The real OG here is Suhail Rizvi. He’s from India originally and Chairman of the Board for the new PLBY company. He was an early investor in Twitter, Square, Facebook and others. His firm, Rizvi Traverse, currently invests in Instacart, Pinterest, Snapchat, Playboy, and SpaceX. Maybe you’ve heard of them. “Rizvi, who owns a sprawling three-home compound in Greenwich, Connecticut, and a 1.65-acre estate in Palm Beach, Florida, near Bill Gates and Michael Bloomberg, moved to Iowa Falls when he was five. His father was a professor of psychology at Iowa. Along with his older brother Ashraf, a hedge fund manager, Rizvi graduated from Wharton business school.” “Suhail Rizvi: the 47-year-old 'unsocial' social media baron: When Twitter goes public in the coming weeks (2013), one of the biggest winners will be a 47-year-old financier who guards his secrecy so zealously that he employs a person to take down his Wikipedia entry and scrub his photos from the internet. In IPO, Twitter seeks to be 'anti-FB'” “Prince Alwaleed bin Talal of Saudi Arabia looks like a big Twitter winner. So do the moneyed clients of Jamie Dimon. But as you’ve-got-to-be-joking wealth washed over Twitter on Thursday — a company that didn’t exist eight years ago was worth $31.7 billion after its first day on the stock market — the non-boldface name of the moment is Suhail R. Rizvi. Mr. Rizvi, 47, runs a private investment company that is the largest outside investor in Twitter with a 15.6 percent stake worth $3.8 billion at the end of trading on Thursday (November, 2013). Using a web of connections in the tech industry and in finance, as well as a hearty dose of good timing, he brought many prominent names in at the ground floor, including the Saudi prince and some of JPMorgan’s wealthiest clients.”
https://www.nytimes.com/2013/11/08/technology/at-twitter-working-behind-the-scenes-toward-a-billion-dollar-payday.html Y’all like that Arab money? How about a dude that can call up Saudi Princes and convince them to spend? Funniest shit about I read about him: “Rizvi was able to buy only $100 million in Facebook shortly before its IPO, thus limiting his returns, according to people with knowledge of the matter.” Poor guy :(
He should be fine with the 16 million PLBY shares he's going to have though :)
Shuhail also has experience in the entertainment industry. He’s invested in companies like SESAC, ICM, and Summit Entertainment. He’s got Hollywood connections to blast this stuff post-merger. And he’s at least partially responsible for that whole Twilight thing. I’m team Edward btw.
I really like what Suhail has done so far. He’s lurked in the shadows while Kohn is consolidating the company, trimming the fat, making Playboy profitable, and aiming the ship at modern growing markets.
https://www.reuters.com/article/us-twitter-ipo-rizvi-insight/insight-little-known-hollywood-investor-poised-to-score-with-twitter-ipo-idUSBRE9920VW20131003 Ben “The Bridge” Kohn is an interesting guy. He’s the connection between Rizvi Traverse and Playboy. He’s both CEO of Playboy and was previously Managing Partner at Rizvi Traverse. Ben seems to be the voice of the Playboy-Rizvi partnership, which makes sense with Suhail’s privacy concerns. Kohn said this:
“Today is a very big day for all of us at Playboy and for all our partners globally. I stepped into the CEO role at Playboy in 2017 because I saw the biggest opportunity of my career. Playboy is a brand and platform that could not be replicated today. It has massive global reach, with more than $3B of global consumer spend and products sold in over 180 countries. Our mission – to create a culture where all people can pursue pleasure – is rooted in our 67-year history and creates a clear focus for our business and role we play in people’s lives, providing them with the products, services and experiences that create a lifestyle of pleasure. We are taking this step into the public markets because the committed capital will enable us to accelerate our product development and go-to-market strategies and to more rapidly build our direct to consumer capabilities,” said Ben Kohn, CEO of Playboy.
“Playboy today is a highly profitable commerce business with a total addressable market projected in the trillions of dollars,” Mr. Kohn continued, “We are actively selling into the Sexual Wellness consumer category, projected to be approximately $400 billion in size by 2024, where our recently launched intimacy products have rolled out to more than 10,000 stores at major US retailers in the United States. Combined with our owned & operated ecommerce Sexual Wellness initiatives, the category will contribute more than 40% of our revenue this year. In our Apparel and Beauty categories, our collaborations with high-end fashion brands including Missguided and PacSun are projected to achieve over $50M in retail sales across the US and UK this year, our leading men’s apparel lines in China expanded to nearly 2500 brick and mortar stores and almost 1000 digital stores, and our new men’s and women’s fragrance line recently launched in Europe. In Gaming, our casino-style digital gaming products with Scientific Games and Microgaming continue to see significant global growth. Our product strategy is informed by years of consumer data as we actively expand from a purely licensing model into owning and operating key high-growth product lines focused on driving profitability and consumer lifetime value. We are thrilled about the future of Playboy. Our foundation has been set to drive further growth and margin, and with the committed capital from this transaction and our more than $180M in NOLs, we will take advantage of the opportunity in front of us, building to our goal of $100M of adjusted EBITDA in 2025.”
https://www.businesswire.com/news/home/20201001005404/en/Playboy-to-Become-a-Public-Company Also, according to their Form 4s, “Big” Dong Liu and “lil” Suying Liu just loaded up with shares last week. These guys are brothers and seem like the Chinese market connection. They are only 32 & 35 years old. I don’t even know what that means, but it's provocative.
https://www.secform4.com/insider-trading/1832415.htm https://finance.yahoo.com/news/mountain-crest-acquisition-corp-ii-002600994.html Y’all like that China money?
“Mr. Liu has been the Chief Financial Officer of Dongguan Zhishang Photoelectric Technology Co., Ltd., a regional designer, manufacturer and distributor of LED lights serving commercial customers throughout Southern China since November 2016, at which time he led a syndicate of investments into the firm. Mr. Liu has since overseen the financials of Dongguan Zhishang as well as provided strategic guidance to its board of directors, advising on operational efficiency and cash flow performance. From March 2010 to October 2016, Mr. Liu was the Head of Finance at Feidiao Electrical Group Co., Ltd., a leading Chinese manufacturer of electrical outlets headquartered in Shanghai and with businesses in the greater China region as well as Europe.”
Dr. Suying Liu, Chairman and Chief Executive Officer of Mountain Crest Acquisition Corp., commented, “Playboy is a unique and compelling investment opportunity, with one of the world’s largest and most recognized brands, its proven consumer affinity and spend, and its enormous future growth potential in its four product segments and new and existing geographic regions. I am thrilled to be partnering with Ben and his exceptional team to bring his vision to fruition.”
https://www.businesswire.com/news/home/20201001005404/en/Playboy-to-Become-a-Public-Company These guys are good. They have a proven track record of success across multiple industries. Connections and money run deep with all of these guys. I don’t think they’re in the game to lose.
I was going to write a couple more paragraphs about why you should have a look at this but really the best thing you can do is read this SEC filing from a couple days ago. It explains the situation in far better detail. Specifically, look to page 137 and read through their strategy. Also, look at their ownership percentages and compensation plans including the stock options and their prices. The financials look great, revenue is up 90% Q3, and it looks like a bright future.
https://www.sec.gov/Archives/edgadata/1803914/000110465921005986/tm2034213-12_defm14a.htm#tSHCF I’m hesitant to attach this because his position seems short term, but I’m going to with a warning because he does hit on some good points (two are below his link) and he’s got a sizable position in this thing (500k+ on margin, I think). I don’t know this guy but he did look at the same publicly available info and make roughly the same prediction, albeit without the in depth gambling or cannabis mention. You can also search reddit for ‘MCAC’ and very few relevant results come up and none of them even come close to really looking at this thing.
https://docs.google.com/document/d/1gOvAd6lebs452hFlWWbxVjQ3VMsjGBkbJeXRwDwIJfM/edit?usp=sharing “Also, before you people start making claims that Playboy is a “boomer” company, STOP RIGHT THERE. This is not a good argument. Simply put. The only thing that matters is Playboy’s name recognition, not their archaic business model which doesn’t even exist anymore as they have completely repurposed their business.”
“Imagine not buying $MCAC at a 400M valuation lol. Streetwear department is worth 1B alone imo.”
Considering the ridiculous Chinese growth as a lifestyle brand, he’s not wrong.
Current Cultural Significance and Meme Value: A year ago I wouldn’t have included this section but the events from the last several weeks (even going back to tsla) have proven that a company’s ability to meme and/or gain social network popularity can have an effect. Tik-tok, Snapchat, Twitch, Reddit, Youtube, Facebook, Twitter. They all have Playboy stuff on them. Kids in middle and highschool know what Playboy is but will likely never see or touch one of the magazines in person. They’ll have a Playboy hoodie though. Crazy huh? A lot like GME, PLBY would hugely benefit from meme-value stock interest to drive engagement towards their new business model while also building strategic coffers. This interest may not directly and/or significantly move the stock price but can generate significant interest from larger players who will.
Bull Case: The year is 2025. Playboy is now the world leader pleasure brand. They began by offering Playboy licensed gaming products, including gambling products, direct to consumers through existing names. By 2022, demand has skyrocketed and Playboy has designed and released their own gambling platforms. In 2025, they are also a leading cannabis brand in the United States and Canada with proprietary strains and products geared towards sexual wellness. Cannabis was legalized in the US in 2023 when President Biden got glaucoma but had success with cannabis treatment. He personally pushes for cannabis legalization as he steps out of office after his first term. Playboy has also grown their brand in China and India to multi-billion per year markets. The stock goes up from 11ish to 100ish and everyone makes big gains buying somewhere along the way.
Bear Case: The United States does a complete 180 on marijuana and gambling. President Biden overdoses on marijuana in the Lincoln bedroom when his FDs go tits up and he loses a ton of money in his sports book app after the Fighting Blue Hens narrowly lose the National Championship to Bama. Playboy is unable to expand their cannabis and gambling brands but still does well with their worldwide lifestyle brand. They gain and lose some interest in China and India but the markets are too large to ignore them completely. The stock goes up from 11ish to 13ish and everyone makes 15-20% gains.
TL;DR: Successful technology/e-commerce investment firm took over Playboy to turn it into a porn, online gambling/gaming, sports book, cannabis company, worldwide lifestyle brand that promotes sexual wellness, vetern access, women-ownership, minority-ownership, and “pleasure for all”. Does a successful online team reinventing an antiquated physical copy giant sound familiar? No options yet, shares only for now. $11.38 per share at time of writing. My guess? $20 by the end of February. $50 by EOY. This is not financial advice. I am not qualified to give financial advice. I’m just sayin’ I would personally use a Playboy sports book app while smoking a Playboy strain specific joint and it would be cool if they did that. Do your own research. You’d probably want to start here:
WARNING - POTENTIALLY NSFW - SEXY MODELS AHEAD - no actual nudity though https://s26.q4cdn.com/895475556/files/doc_presentations/Playboy-Craig-Hallum-Conference-Investor-Presentation-11_17_20-compressed.pdf Or here:
https://www.mcacquisition.com/investor-relations/default.aspx Jimmy Chill: “Get into any SPAC at $10 or $11 and you are going to make money.”
STL;DR: Buy MCAC. MCAC > PLBY couple weeks. Rocketship. Moon.
Position: 5000 shares. I will buy short, medium, and long-dated calls once available.
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