An Update on GameStop Stock: Delayed Filings and Direct Registration Numbers

GameStop had an incredible Q4 earnings report that exceeded market predictions for both revenue and profit. As a result, the company's stock skyrocketed by over 30%. Nevertheless, there's been some excitement and conjecture among small investors, as GameStop has not yet released their annual report. In recent quarters, GameStop has reported numbers related to their transfer agent's share registration. While this isn't a typical metric to watch, retail investors have been following it closely and discussing its implications for GameStop's future.

Image 1: GameStop Stock: Documents Submitted Late and an Overview of Direct Registration Data The GameStop stock is currently facing some issues with its filings that have been delayed. Besides, there is news about the latest numbers regarding direct registration.

Also, take a look at: The latest news on GameStop's stock, as well as information on the delay of its filings and updates on direct registration numbers.

"Super Quarter" Yet to be Officially Filed

On March 21st, GameStop (GME) - Get Free Report unveiled their fourth-quarter outcomes. The business surpassed market projections in every aspect: GME exceeded anticipated earnings per share and income, and published a favorable net income for the first time since the beginning of 2021.

As expected, the market responded with great enthusiasm. The shares surged more than 50% as soon as the results were announced, before experiencing a slight dip and ultimately closing the following day's trading session at a still impressive 30% increase.

However, unlike in previous fourth quarters, GameStop did not make its Form 10K publicly available. This report is published annually and provides an in-depth summary of the company's operations, financial position, and verified financial statements.

SEC Rule 12b-25 mandates that in case of postponed submission of either 10-K or 10-Q filings, the organization must file a Form NT (signifying "non-timely") allowing an extension period of 5 days for Form 10-Q and 15 days for Form 10-K. Notably, the company needs to present a cogent explanation via Form NT to steer clear of drawing unnecessary attention towards the delay.

If the company fails to meet the deadline, it could have severe repercussions such as losing its registration with the SEC or even being removed from the stock market.

If a company that is listed on the stock exchange delays providing updates to its investors, it can lead to a lot of guesswork. This is particularly the case for GameStop, because its stock price is deeply connected to how individual consumers feel about the company.

GameStop's management is known for being very careful during their earnings calls. They don't give any future predictions and they don't answer questions from people who own shares in the company or from analysts. This makes people even more curious and fuels their speculation.

There are plenty of explanations as to why a corporation might fall behind on its filings, some of which are momentous, while others are not worth mentioning. The primary cause of tardiness in submission is commonly related to uncomplicated accounting problems.

It is noteworthy that certain investigations suggest that if a business does not provide accounting explanations for their delay in filing, investors may assume deeper problems with the company's core values. This, in turn, can result in negative consequences.

When it comes to financial reports, delays in quarterly filings usually lead to more severe drops in price compared to annual filings. This is because quarterly reports contain less data and are not subjected to a thorough review, making them less complicated to complete.

Market participants may still have doubts about a company's management, staffing, and accountability issues if there are delays in filings of any kind.

Retail Investors are Anxiously Awaiting an Update on Direct Registration

In the last few quarterly reports from GameStop, retail investors have been highly attentive to the company's direct registration figures. These shareholders have been promoting the direct registration of shares and any improvements in these numbers are viewed as an indication that the group's actions are having a positive impact.

The method of direct registration is an option for investors who want to keep their securities in book-entry form. With the help of a Direct Registration System (DRS), they can possess stock in their name without involving a mediator like a bank or brokerage firm.

It's important to mention that registering directly is not always as convenient or feasible as owning shares through a brokerage company.

One of the benefits that GameStop shareholders see with direct registration is that transfer agents can't lend their stocks to short sellers, which isn't possible with brokerage firms.

According to the theory, if one were to register shares with GME's transfer agent, then there would be a decrease in the number of shares that short sellers would be able to borrow. Consequently, this could lead to an increase in borrowing rates.

In order for this plan to make a difference, a notable proportion of stockholders must participate. The act of "locking-up" a substantial amount of GME stocks could create obstacles for short sellers attempting to locate GME shares accessible for borrowing.

In 2021, most of the ownership of GameStop's stocks was held by regular people instead of big organizations. Due to the rise of direct registration, GameStop has been able to report impressive quarterly results regarding the amount of GME shares registered with its transfer agent.

Based on the most recent 10-Q report that is currently accessible, GameStop reported that around 71.8 million shares were kept by the transfer agent - indicating a growth of 500,000 since Q2 2022. This signifies that a remarkable 30% of the company's stocks are held outside of brokerage firms.

Image 2: GameStop's stocks recorded with the transfer agent.

A lot of GameStop shareholders who buy from the physical stores feel that this plan could have a big, and maybe never-before-seen, effect on the value of GME's shares. As a result, the postponed announcement of GME's precise registration statistics has caused more worry for those investors who are eager to know the numbers laid out in the company's Q4 financial reports.

Please note that the following section is not intended to be taken as investment advice. The author may have a personal interest in one or more of the stocks discussed in this report. Additionally, there may be affiliate links included in this article. Please be aware that these relationships have no impact on the content of the article itself. Thank you for your support of Wall Street Memes.