Comparing GameStop and AMC Theaters DISCLAIMER 1: None of this document is to be taken as financial advice. Your financial decisions are your own. DISCLAIMER 2: Some of the data below may be slightly outdated, as it took a while to write this DD (Due Diligence) and a lot of things have own 5.19M shares in total or 6.18% of the total shares outstanding, more insider selling from AMCoccurred since (e.g. BlackRock purchased 473,900 more shares of GameStop to now , AMC restructuring debt, GameStop developments with the NFT marketplace, AMC hired new Vice President Ellen Copaken, etc.) Source 1 - https://www.sec.gov/Archives/edgar/data/1364742/000083423722004089/us36467w109 9_012822.txt Source 2 - http://openinsider.com/screener?s=amc&o=&pl=&ph=&ll=&lh=&fd=730&fdr=&td=0&tdr= &fdlyl=&fdlyh=&daysago=&xp=1&xs=1&vl=&vh=&ocl=&och=&sic1=-1&sicl=&sich=&grp= 0&nfl=&nfh=&nil=&nih=&nol=&noh=&v2l=&v2h=&oc2l=&oc2h=&sortcol=0&cnt=100&pag e=1 Source 3 - https://gamestop.gcs-web.com/static-files/713417ad-e18f-4f2c-bc1c-312f536d8b36 Source 4 - https://twitter.com/CEOAdam/status/1491445977131229191 Page 1 Good afternoon, This is broken up into several different categories as far as information. I. Preface (page 3) II. AMC Fundamentals (page 5) III. GME Fundamentals (page 25) IV. Fundamental Comparison (page 47) V. Squeeze Metrics (page 73) VI. Potential Cons (page 91) VII. Quick Pro Summary (page 91) VIII. Addressing AMC posts done by AMC posters (page 92) IX. Contributors (page 101) X. Afterword (page 101) Now, let’s go ahead and jump right into this so that we don’t waste too much of your time. It is recommended that you not be in an emotional state while reading this as it can be foreseen this turning into a shit flinging festival in the comments. So, if you’re emotionally invested in your stock right now, take however long you need to calm down so you’re able to look at this with a clear mind. Also, grab a beer or six beers and enjoy reading! This document is meant to be read in its entirety. Not cherry picked for information. Page 2 I. Preface Originally, it was not thought necessary to write a section like this however there seems to be misinformation circulating that needs to be addressed. What is Shorting? Shorting a stock is where you borrow a security that has been lent to you and sell the security in the hopes of buying it back later at a cheaper price. This borrowed security can be used in a multitude of fashions as a market maker. - Can sell it back and forth between companies which would create a wash sale down. - Can create a sell wall that would have to be bought completely for the price to go beyond it. - Can use it to mitigate your own risk and drive the price back down by heavily shorting. - There are other methods but you get the idea. However, the main concern is when you sell this stock to a person who is planning to hold it. Now, you have to go into the market and buy stock to meet the delivery of the one borrowed (If you are margin called or want to close your short position). In essence, when you short a stock, you are creating a share that should not exist or better put was not a part of the original total shares outstanding. What is Naked Shorting? Naked shorting is when you sell short while a borrow is not located. As a market maker, you can do this in the name and for the sake of liquidity. Naked shorting can also be done by selling a call that is then exercised away when you do not possess the shares. Source 1 - https://www.investopedia.com/terms/s/shortselling.asp Source 2- https://www.reddit.com/r/Superstonk/comments/rww52i/wall_street_vetera n_charles_gradante_calls_out/ Source 3 - https://www.sec.gov/investor/pubs/regsho.htm This document is meant to be read in its entirety. Not cherry picked for information. Page 3 Under D - “Naked” short selling is not necessarily a violation of the federal securities laws or the Commission’s rules. Indeed, in certain circumstances, “naked” short selling contributes to market liquidity. Source 4 - https://www.investopedia.com/articles/optioninvestor/09/naked-short-sellin g.asp Is it possible to have more than 100% ownership of a company without any foul play? The answer is yes. The way this also happens can be explained in this scenario below: ‘Company A’ has 1 million shares outstanding. ‘Institution B’ decides to buy ALL 1 million shares. ‘Institution C’ decides to borrow 200,000 shares from ‘Institution B’ to short the stock, however ‘Institution D’ ends up purchasing all these shorted stock. Now the amount of shares in circulation is 1,200,000 shares (20% more than the shares outstanding) and ‘Institution C’ must purchase back the 200,000 shares at a later date to CLOSE the short position. Furthermore, this can cause institutional ownership to be more than 100% in some cases, as both ‘Institution B’ and ‘Institution D’ own these shares in this example. (This doesn’t take away the fact many company's stocks are shorted in harmful ways that eventually drive the company to bankruptcy. The above example was to show that this can happen without foul play.) Source 5 - https://www.investopedia.com/ask/answers/07/institutional_holdings.asp#: ~:text=Sometimes%2C%20you%20may%20come%20across,of%20a%20 company's%20outstanding%20shares. This document is meant to be read in its entirety. Not cherry picked for information. Page 4 II. AMC Fundamentals 1. Partnership with Warner Brothers It could be said this is a great opportunity for AMC because they’re able to have exclusive rights to movies when they’re released. The unfortunate thing is that there are multiple studios which will require more partnerships and for streaming services to be okay with this. Something that it does bring up as a question is what the partnership entails. What is AMC giving to WB in order to have exclusive rights for the 45 days? We don’t know what this is and would assume a higher percentage cut of movie profits, but it is currently not known. So, we’d say this is a potentially great thing for AMC investors. Source - https://www.theverge.com/2021/8/10/22618697/amc-warner-brothers-thea ter-window-45-days-movies-streaming-battle-hbo-max This document is meant to be read in its entirety. Not cherry picked for information. Page 5 2. New Executives Vice President added Ellen Copaken VP of Growth Strategy Source - https://news.bloomberglaw.com/bankruptcy-law/amc-theatres-names-ellen -copaken-vp-of-growth-strategy Source 2 - https://twitter.com/CEOAdam/status/1491445977131229191 This document is meant to be read in its entirety. Not cherry picked for information. Page 6 3. We commend AMC for listening and creating an NFT to be delivered for a ticket and for share ownership. However, these things are the equivalent of Plastic McDonalds toys. Looking around online, if someone wanted to create an NFT to sell or distribute which looked similar to the one AMC made, it looks like the total time necessary would be ~15 minutes plus art time. So, this does not seem to be a task that is insurmountable by anyone. This also doesn’t seem like something you would need to hire specific people for like the entire NFT department GameStop has. Furthermore, the “I OWN AMC” NFT could have been claimed by anyone if they wanted it, which makes it almost worthless. Source - https://news.bitcoin.com/nft-craftiness-mint-a-non-fungible-token-art-collec tible-in-less-than-15-minutes/ This document is meant to be read in its entirety. Not cherry picked for information. Page 7 4. Popcorn GDP and what this would add to the company So, we will make this one short and sweet. The total gross domestic product of popcorn (the edible kind) in the world is estimated to be ~5.55B by 2025. So, let’s say that it is 5.55B right now. Now, this is if AMC is able to distribute worldwide and every other manufacturer of popcorn (the edible kind) goes out of business such as Orville etc. This is also under the assumption that AMC doesn’t have to purchase any additional infrastructure to distribute worldwide along with the different varieties of popcorn requiring different infrastructure as well. Just adding the 5.55 Billion to the stock equates to a total market share addition of $10.82 added per share. MATH: 5.55B divided by 513M. While this would be good for the stock, you may see why this would be a large task to try and handle. Now, let’s say that it’s actually double 5.55B this could be due to the added infrastructure required or the partnerships. We’re giving AMC the benefit of the doubt and doubling the GDP of popcorn and adding it straight to AMC without any negative parts to this fundamentally. The $10.82 turns into $21.64 added per share. Source 1 - Popcorn GDP source - https://www.wboc.com/story/43954333/global-popcorn Source 2 - Further research on Amplify if you’re inclined - https://www.cnbc.com/2015/08/05/amplify-a-popcorn-company-with-a-11-b illion-market-value.html Amplify is a snack food brand that started off with a $1.1B market valuation. This document is meant to be read in its entirety. Not cherry picked for information. Page 8 5. Now, we had mentioned prior how AMC would have issues trying to capture the world's GDP of Popcorn but let’s go into what all would be necessary for this: a. First, the cost basis for actual popcorn per bag is less than $2.00 including electricity for microwaving and the purchase price of the bag itself. (Roughly per bag) b. If they’re planning to do delivery of popcorn then it would require this amount per bag unless people are purchasing it as a luxury item. In which case it’s whatever at that point. We don’t know of the viability of this, but we do know that $2.00 would have to be beaten to have this popcorn as a consideration. This also doesn’t account for the 2 minutes and 30 seconds that would be required to make it by yourself vs however long for it to be delivered ready-made. c. If they plan to have bagged popcorn, then this would require an actual plant like with what Orville has as their current popcorn is produced via a kettle method in theaters and not bagged. d. Popcorn sold in grocery stores – This could be viable depending on price and I won’t discount it. However, a few places we know and have gone to offer popcorn for free without charging for the purchase just for store patronage. Again, this may be an expense because it will require: an individual manning the popcorn station, a distribution or piggybacking distribution on grocery stores, and stations that sell popcorn itself which includes but is not limited to the kettle, cash register, and employee wage. e. On top of all of what is mentioned, having the popcorn delivered directly to people would no longer get people into the theaters spending more for sweets, sodas, or the tickets. So, they’re just ordering the popcorn to stay inside and watch Netflix or other streaming services. This document is meant to be read in its entirety. Not cherry picked for information. Page 9 6. Moving into food distribution: We won’t discount this as it was mentioned to me in passing but we believe it holds weight. a. This would put more money into AMC’s pockets via utilization of DoorDash b. Not a large cost increase other than the additional reserves of food that would possibly need to be stored. c. The question is will people, other than AMC Investors, be purchasing food from AMC rather than ordering from Chilis, Applebees, LongHorn, Texas Roadhouse, IHop, Dennys, Chipotle, Olive Garden, Carabbas, Dairy Queen, Five guys, or any of the other chain eateries that offer delivery through applications and specialize in food? d. We won’t discount that this is a viable revenue stream without as much additional overhead, however, there are drawbacks such as the local competition and food storage. This document is meant to be read in its entirety. Not cherry picked for information. Page 10 7. The share offering was massively hampering any potential big squeeze. The shares outstanding are as follows: a. June 30, 2018 – 127.5M shares outstanding. b. Sept. 14, 2018 - 103.85M shares outstanding. c. Feb. 21 2020 – 104.24M shares outstanding. d. July 31, 2020 – 109.32M shares outstanding. e. Oct. 20, 2020 – 124.32M shares outstanding. f. Dec. 8, 2020 – 160.70M shares outstanding. g. Dec. 28, 2020 – 216.10M shares outstanding. h. Jan 22, 2021 – 339.07M shares outstanding. i. Feb. 1, 2021 – 377.87M shares outstanding. j. Mar. 3, 2021 – 450.16M shares outstanding. k. June 1, 2021 – 500.78M shares outstanding. l. June 30, 2021 – 513.33M shares outstanding. Source for shares outstanding - https://ycharts.com/companies/AMC/shares_outstanding This document is meant to be read in its entirety. Not cherry picked for information. Page 11 8. AMC currently has liquidity availability of more than $1.8 billion (including cash and undrawn revolver lines) Source 1 - https://s25.q4cdn.com/472643608/files/doc_financials/2021/q3/FINAL-3Q- Earnings-Press-Release-20211108-1430-v.F.pdf Source 2 - https://investor.amctheatres.com/financial-performance/quarterly-results/d efault.aspx# 9. AMC is in the process of acquiring more theaters to add to their already large amount of theaters. This has pros and cons a. Not a change or revamp of their old business model so still relying on existing revenue stream b. Creation of new locations to expand brand recognition. c. If another plague hits they’re back where they started as they haven’t revamped into something new. d. Becoming the largest movie chain could mean potential deals with movie producers which could benefit the shareholders through a price increase. This could be with movie studio partnerships or something else but being the largest theater chain does have some weight that can be swung around. This document is meant to be read in its entirety. Not cherry picked for information. Page 12 10. Current Debt of AMC is roughly around 5.45 Billion dollars. While this debt is currently deferred for roughly a year and a half this is still a large amount of cash due. Even at a rate of 3% per year that is $163,500,000 due every year and that would be an amazing interest rate if they managed to get it. Judging by Source 4 it looks as though their rough interest rate per year is roughly 7.72%. To figure this out I used: (Q1 153M+Q2 89.5M+Q3 89.9M+Q4 89M)(This is not a correct or proper number and if it is found to be wrong then the percentage will change) Divided by total debt of 5.45Billion x 100 to get the percentage = 7.72% roughly per year on the debt or a total expenditure of $420,740,000 dollars every year. Source 1 - https://ycharts.com/companies/AMC/total_long_term_debt Source 2 - Debt Deferment - https://twitter.com/CEOAdam/status/1473847871170650112 Source 3 - PDF Source for Debt Deferment - https://d18rn0p25nwr6d.cloudfront.net/CIK-0001411579/81980063-baf3-4 71e-8808-895f245c92a6.pdf This document is meant to be read in its entirety. Not cherry picked for information. Page 13 Source 4 - https://tradingeconomics.com/amc:us:interest-expense-on-debt Source 5 - https://www.fool.com/investing/2021/10/04/amc-pays-back-high-interest-d ebt/ Source 5 is not used as part of the report but is instead used to show that the debt is cumulative and is not a decreasing/increasing amount per year. 153M+89M for the first 6 months roughly. We will quote Source 5 directly as it’s fool and they don’t deserve the traffic. “It's safe for AMC to start paying back some loans On Sept. 30, AMC announced a repurchase of $35 million of its debt bearing a minimum 15% interest rate. The cost to repurchase the debt was $41.3 million, including principal and unpaid interest. As a result, AMC will save $5.25 million annually on interest expenses. That's undoubtedly good news for the battered movie theater chain, which has been devastated by the pandemic. "The repurchase of some of our highest cost debt is one of the many steps that we are taking to optimally position AMC for the future," said Adam Aron, AMC's chairman and CEO. Overall, management has skillfully navigated the coronavirus pandemic. The company was forced to shut its doors to moviegoers, which essentially brought its revenue to zero for several months. And because it was not feasible to reduce expenses to zero (you can't eliminate rent expense), the company was losing hundreds of millions of dollars each month. Raising cash became the most critical activity, and management did not disappoint. In the most recent quarter alone, the company raised $1.25 billion of new equity capital. As of June 30, AMC had $2 billion in liquidity on its balance sheet. And with nearly all of its movie theaters reopened and folks cautiously returning to watching films on the big screen, the worst-case scenario of running out of cash is all but eliminated for AMC. Therefore, it's safe for AMC to start using that money to pay back loans. This document is meant to be read in its entirety. Not cherry picked for information. Page 14 The next phase for AMC Paying back $35 million of its high-interest debt was a step in the right direction, but AMC still has a long way to go. As of June 30, the company had $5.5 billion on debt on its balance sheet. That debt has cost the company $239.6 million in interest expenses in the first six months of 2021. To put that figure into context, overall revenue during the same time was $593 million. AMC's interest expense as a portion of revenue is still a heavy burden on the company. Thankfully, AMC also has $1.8 billion of cash on its balance sheet. If it can continue using the cash to pay off more of its highest-interest debt, it will go a long way in returning the company to operating profitably. AMC is heading in the right direction in its recovery from the pandemic. Still, investors interested in buying the stock should wait until the company makes more progress in raising revenue and decreasing expenses.” To highlight a particular point of the above: That debt has cost the company $239.6 million in interest expenses in the first six months of 2021. To put that figure into context, overall revenue during the same time was $593 million. Source 5 - https://www.fool.com/investing/2021/10/04/amc-pays-back-high-interest-d ebt/ (Note: This is the most biased and easily the worst source used throughout the document. We just think there was some important information that shouldn’t be ignored simply because it was written by fool and the points brought up by the journalist were good for discussion.) 11. Adam Aron has been quite active with his shareholders which can be shown by answering questions over the shareholders call. This can be seen as a positive thing because the shareholders are being heard. He has made several appearances to answer the news as well as speak with shareholders. Now, on the negative side, Adam Aron has also been flying around from theater to theater to do showings of movies rather than trying to figure out how to deal with the 5.4B debt situation or coming up with a strategy to meet this need for loan repayment. If Aron is planning to retire, though, like he has shown by selling most of his vested shares, then he needs to have someone that he can pass the business along to to see AMC survive. This document is meant to be read in its entirety. Not cherry picked for information. Page 15 12. NFL and UFC at 4% of their theaters. Through research it is believed to be around 950 theaters total and roughly 38 have the capacity to do sports. Math could be slightly off but feel free to check the sources. While this may be a new business venture, it is not known how well this will work. The reasons have been listed below. a. Bringing the bar scene into a carpet floor and leather chair environment. Personal experiences lead this to be considered a bad idea. If you look at the interior of bars and where the UFC and Football games normally are there is a reason that furniture is near indestructible with the floor being made of tile or concrete. These surfaces are easy to clean in case of a mess. Now, we can hear you say, “well, I’m going for the experience that the theater will provide” ok cool we have more points below. b. Pitchers of beer are $10 over what they are normally at a bar. c. Non-easy clean surfaces would mean the cleaning crew is going to have to clean the floors well in case of an unexpected mess. d. This is a viable venture if you live close by one of the aforementioned theaters; however, some have to travel an hour to get to a theater that has the capacity to play a game where as there are 4-5 bars near some writing this along with restaurants that have blow-up screens that play the game/UFC fight as well. So, while this may not be a bad idea it is something that is unable to prop up the stock price. Source 1 - Total amount of AMC theaters - https://investor.amctheatres.com/resources/investor-faq/default.aspx#:~:te xt=back%20to%20top-,How%20many%20theatres%20does%20AMC%20 operate%3F,10%2C500%20screens%20across%20the%20globe. Source 2 - Theaters with football - https://www.amctheatres.com/sunday-football This document is meant to be read in its entirety. Not cherry picked for information. Page 16 13. Share ownership for AMC. This is the insider information according to the provided source however there are some that might not be considered as part of the board. So, since it appears as though ~959,843 shares (subject to change with more insider selling over time) are owned by the board, let’s look at what that chart looks like. Note - Wanda Group has sold their stake in AMC and no longer maintains 10% ownership in the company. They still maintain a limited amount of shares but it is not where it was prior. That sliver at the top is the amount the entire board of AMC owns in shares. To further expound upon this as a percentage: 959,863/513,330,000*100 = 0.18% Additionally, it can be found that insiders have sold shares on the dates shown in the above pie charts as well as before then which means shares were sold to the general public as late as 12/09/2021. Source 1 - https://www.secform4.com/insider-trading/1411579.htm This document is meant to be read in its entirety. Not cherry picked for information. Page 17 Now, this is a reply specifically to people that are saying that insider share ownership doesn’t matter and quoting DFV/KG/Roaring Kitty when saying this. If you recall there are also videos of DFV saying, “I looked at AMC. This is a terrible chart. It’s at support. They’re battling some shit right now. I don’t have any thoughts on AMC. They’re battling some risks with the pandemic. I don’t know how they’re going to fair but assuming we overcome this people will still want to see movies in theaters. Investment thesis is a lot more than (when investing) this product will be around in the future. No opinion.” Second video: “I looked at amc on the last tube. No strong opinion on AMC. Chart doesn’t look great. No strong opinion. I’m a fundamentals investor. This isn’t to say it’s bad or that it has no future. I just don’t care or have an opinion. Could be something happening but can’t tell in chart.” Source 2 - https://www.youtube.com/watch?v=Q50LPJ0TSoo Source 3- https://www.youtube.com/watch?v=6aiUJhLYohA The below shows that AMC has given out 8.6M to the executives because of their efforts during covid. Source 4 - https://deadline.com/2021/02/amc-entertainment-ceo-adam-aron-a-3-75-m illion-extra-bonus-for-extraordinary-effort-navigating-covid-1234702316/ 14. Accepting Crypto. Both companies are doing this through a third party. Source - https://www.marketwatch.com/story/amc-officially-begins-accepting-bitcoin -and-other-cryptocurrencies-says-ceo-on-twitter-11636715493#:~:text=Aft er%20much%20fanfare%2C%20the%20chief,Ethereum%2C%20Bitcoin% 20Cash%2C%20Litecoin. This document is meant to be read in its entirety. Not cherry picked for information. Page 18 15. AMC NFTs. AMC have released two NFT drops so far. This was the “I own AMC” NFT as a gesture to the shareholders and the Sony partnership that included 100+ Spider-Man NFT’s. Although these were both thoughtful ideas, they were given out for free and so AMC received no revenue as a result of the NFT sales. They could further explore this idea in the future and consider charging $ for unique and rare NFT’s for movies as new movies enter the theaters. Source 1- https://twitter.com/CEOAdam/status/1481692645806252034 Source 2- https://twitter.com/ceoadam/status/1465018558514143232?lang=en This document is meant to be read in its entirety. Not cherry picked for information. Page 19 16. CEO Adam Aron announced AMC will now sell vegan nuggets at the movie theaters. The main point about this is the fact he stated “we’ve been working for years to be able to make this announcement.” Although, it takes a long time to create a food product to be released into stores nation-wide, it is alarming that they spent years working on a product that may prove to bring in low amounts of revenue per year. Management should consider working on other streams of revenues that can help turn the company around and thrive. Source - https://twitter.com/ceoadam/status/1479318224541995010 This document is meant to be read in its entirety. Not cherry picked for information. Page 20 17. Mainstream media attention: Contrary to belief, AMC has had lots of Mainstream media attention throughout 2021. The $AMC ticker symbol was looked at 195million times in 2021 on Yahoo Finance, 30 million more times than that of ANY other ticker symbol. Source 1 - https://twitter.com/CEOAdam/status/1476065261098872834?ref_src=twsr c%5Egoogle%7Ctwcamp%5Eserp%7Ctwgr%5Etweet This can be greatly attributed to being a retail sentiment stock with many influencers and mainstream media attention figures treating the stock as being a “forefront to defeating Wall Street”. This has especially been the case with CNBC hosts such as Charles Payne, Melissa Lee, and even Jim Cramer showing their support for the stock. This included a 49 minute video that CNBC released on Youtube titled “How the AMC Apes Cracked Wall Street” in which Melissa Lee interviews many AMC figures such as Adam Aron, Trey’s Trades, and Matt Kohrs. This document is meant to be read in its entirety. Not cherry picked for information. Page 21 Source 2 - https://twitter.com/MelissaLeeCNBC/status/1454103426191798279?t=fVv VOZmNYvH-TsCFDBLvcQ&s=19 Source 3 - How The AMC Apes Cracked Wall Street - https://www.youtube.com/watch?v=w5QnYYG72LA&ab_channel=CNBC Source 4 - https://twitter.com/cvpayne/status/1455817815785721856 This document is meant to be read in its entirety. Not cherry picked for information. Page 22 Source 5 - https://twitter.com/cvpayne/status/1456693858570579972 Source 6 - https://twitter.com/matt_kohrs/status/1457356094725033991 It is evident that AMC has peaked in MSM attention and with the fact that “AMC Stock” was google searched more times than “Stimulus Check”, this may have been a driving This document is meant to be read in its entirety. Not cherry picked for information. Page 23 factor which resulted in the stock running over 3000% (from yearly lows to yearly highs). This reinforces the fact that AMC is reliant on people speaking about the stock, similar to sentiment of DOGE coin or SHIBA INU coin. This leaves the question, if AMC is solely reliant on hype, what happens if a new shiny distraction is presented by mainstream media(MSM)? AMC investors may find that if a new crypto or stock is pumped by MSM, many may flock towards the new security as AMC is no longer a fundamentals/turnaround play (as mentioned in the report, the MAXIMUM market cap of movie theater industry + popcorn industry is ~21.104B, which reinforces AMC is no longer the fundamentals play it once was in 2020). Source 7 - https://www.marketwatch.com/story/googles-2021-year-in-search-amc-and -gme-stocks-dogecoin-stimulus-checks-and-shortages-dominated-queries- 11638950486 Source 8 - https://www.ibisworld.com/industry-statistics/market-size/movie-theaters-u nited-states/ Source 9 - https://www.prnewswire.com/news-releases/global-popcorn-market-to-rea ch-16-1-billion-by-2026--301376633.html 18. To end off this AMC fundamentals section, I would like to reiterate that if AMC controlled the entire movie theater industry, as well as the popcorn industry, this would leave a MAXIMUM market cap of ~ $21.104B (2021 figs). With the current market cap sitting at ~$7.7B this suggests that AMC owns/controls a large portion of both industries which is not the case as mentioned above. Furthermore, even if AMC somehow took over and COMPLETELY controlled both the industries, this only leaves 300% growth in the stock price from current levels (currently at $15). It is recommended that the CEO and management team explore new revenue streams. It is evident with the ~ $5.5 Billion debt that the company is struggling to remain profitable, partially due to hundreds of millions of dollars spent just on the debt interests. This is harming the progression of the company and a long term solution will be required to solve this. This is especially the case in the current environment where COVID is still going to be a problem in 2022. If management is unable to find new revenue streams, AMC shareholders may find the stock price will remain stagnant over the coming years. Also, this may result in further dilution of stock as it is the easiest way out of bleeding debt. This document is meant to be read in its entirety. Not cherry picked for information. Page 24 III. GME Fundamentals: 1. GameStop is in the process of hiring people from Amazon, Chewy, Apple, Arteza, Zulily, Microsoft, Google, and other places to the tune of 350+ execs now. Saying 350 execs doesn’t really have as much impact. So, the list showing them from GMEDD (on Twitter) has been added to showcase how many people have been added. This document is meant to be read in its entirety. Not cherry picked for information. Page 25 This document is meant to be read in its entirety. Not cherry picked for information. Page 26 This document is meant to be read in its entirety. Not cherry picked for information. Page 27 This document is meant to be read in its entirety. Not cherry picked for information. Page 28 Source - https://onedrive.live.com/View.aspx?resid=D645EE2EDB0B6!2167&authk ey=!AMFLvwFiMuIKSHI Note about above source – this is a one drive link so I would recommend not logging in via a browser with your google chrome logged in already. Should be able to be used in private browsing or another method. This is just to give you an idea of who has been hired by GameStop and to show what GameStop is doing to try and turn around the company. Literally 5 pages of hires just as names, where they’re from, and when they’re hired. The fact top level management from some of the greatest companies in the world are leaving This document is meant to be read in its entirety. Not cherry picked for information. Page 29 their jobs to work at GameStop is bullish and suggests Ryan Cohen (and the team) has a great roadmap ahead. 2. Matt Finestone from Loopring has this to say in regards to leaving Loopring for a different opportunity. He is now the head of blockchain at Gamestop. “So what’s next? I am not leaving Loopring because I am tired of it, or because I am not interested in its future. I think you may see from my sappy message above, that is not the case. The fact is, an opportunity has presented itself that I am extremely excited about, and I feel I simply must take. I view it as a once-in-a-lifetime, perfect-timing, far-reaching opportunity/challenge that I need to pursue for its own sake, and for my personal development. I cannot give more information at the moment, but I will be sure to do so when the time is right — I hope on the order of a few months. This opportunity will keep me firmly in the blockchain (Ethereum) space, so I hope to be seeing many of you around real soon :).” Source - https://matthewfinestone.medium.com/thank-you-loopring-16993766c200 3. GameStop is in the process of doing something with NFTs and we don’t know what. This could be an NFT marketplace, a blockchain-style market, and/or an NFT dividend. However, through the GameStop Careers website, it seems they are hiring people with crypto, Ethereum, and Ethereum layer 2 knowledge/experience for an “NFT Platform”. As a side point, it is possible (most likely) that GameStop is entering the Metaverse and all things Web3 Related. In addition to this, there have been people that have worked with GameStop as Contractors for specific jobs to our knowledge such as (Twitter Handle) Foobar. Furthermore, Grayscale Investments in association with Bank of America has stated that they believe the Metaverse to be a $1 trillion opportunity. If GameStop is able to become a notable player in the Metaverse, this can present new revenue streams. If you want to dig further, we would recommend looking up predicted valuations for the metaverse and endless possibilities that would come out of Web3 gaming + NFTs (e.g. selling digital collectibles similar to Funko Pops, trading skins on games such as Fortnite, play to earn, etc). This document is meant to be read in its entirety. Not cherry picked for information. Page 30 Source 1 - https://careers.gamestop.com/us/en/job/Req-132641/Software-Engineer-N FT-Platform-REMOTE Source 2 - https://careers.gamestop.com/us/en/job/Req-132158/Accounting-Manager -Blockchain Source 3 - https://careers.gamestop.com/us/en/job/Req-131809/Sr-Software-Enginee r-NFT-Platform-REMOTE Source 4 - https://www.zerohedge.com/crypto/these-are-things-real-people-are-spend ing-millions-real-dollars-metaverse Source 5 - https://news.bitcoin.com/bank-of-america-massive-opportunity-metaverse- entire-crypto-ecosystem This document is meant to be read in its entirety. Not cherry picked for information. Page 31 4. In case you haven’t seen it, GameStop has teased an NFT marketplace. GameStop has recently called creators allowing people to send in submissions of their work to be featured on the NFT marketplace. This shows the marketplace is almost completed and may be released soon. Update - It seems they have received a lot of submissions within the short period that they called out for creators, so many in-fact that they have closed submissions for now. This is bullish in itself that it shows a lot of people want to be creators and are interested. If this NFT platform accommodates artists, musicians, and other creators, this could in itself become the best NFT platform on the web as of now. Source - https://nft.gamestop.com/ 5. GameStop performance centers. These are quite awesome and the video below is worth a watch as it’s a lot to explain. Source - Youtube video of performance center - https://www.youtube.com/watch?v=SfkQ60qe39U This document is meant to be read in its entirety. Not cherry picked for information. Page 32 6. GameStop seems to be remodeling some of their stores and exploring new revenue opportunities. We’ve posted some pictures that were recently retweeted by GameStop (originally posted in January 2020). There seems to be a lot of potential for this idea of rebranding some stores as an ESports venue where there are tournaments, finding new talent, and being the ultimate destination for all gamers. Source - https://twitter.com/gamestop/status/1221947966195490816?lang=en This document is meant to be read in its entirety. Not cherry picked for information. Page 33 7. Bought back shares. Originally Dr. Burry wrote to GameStop and urged them to buy shares back on the market. It took them a while but they ended up doing this. Source 1 - https://ycharts.com/companies/GME/shares_outstanding Source 2 - Business wire link - https://www.businesswire.com/news/home/20190819005633/en/Scion-Ass et-Management-Urges-GameStop-Buy-238?mod=article_inline We thought this subreddit board also had some interesting information: Source 3 - Security Analysis 2019 - https://www.reddit.com/r/SecurityAnalysis/comments/ctuzzu/michael_burry _letter_to_gamestop/ This document is meant to be read in its entirety. Not cherry picked for information. Page 34 8. GME's debt was paid off; the exception to this is GameStops 46.2M low interest loan from France (related to COVID). Stores were closed that were under performing as well. This is to the tune of 180-200 stores in 2019. Dec. 8 in a presentation to investors, it was stated that GameStop will close more than 1,000 stores by the end of its fiscal year in March. This comes after the company already closed over 783 stores over the previous two years. It may need to be explained as to why this is good. To make it short, we would say this is a good thing because it shows that the business assets that aren’t generating money for the company are being cut, which means the amount of expenditure per fiscal year is being decreased. Source 1 - Game Industry 2019 link - https://www.gamesindustry.biz/articles/2019-09-10-gamestop-to-close-180 -200-underperforming-stores-globally-this-year Source 2 - https://bestlifeonline.com/gamestop-closing/ Source 3 - https://ycharts.com/companies/GME/total_long_term_debt 9. Share offering from GameStop generated over 1.5 Billion liquid capital. Source 1 - GameStop link talking about first offering- https://news.gamestop.com/news-releases/news-release-details/gamesto p-completes-market-equity-offering-program Source 2 - GameStop link talking about second offering - https://news.gamestop.com/news-releases/news-release-details/gamesto p-completes-market-equity-offering-program-0 This document is meant to be read in its entirety. Not cherry picked for information. Page 35 10. Ownership and leadership – Ryan Cohen owns almost 12% (11.8% to be exact) of GameStop that he bought in with his money. Note - It is not known if Kim Trust has sold their stake in the company at this juncture it is believed so but they are not in this example. This document is meant to be read in its entirety. Not cherry picked for information. Page 36 This is just one individual so let’s look at the other insiders that are a part of GameStop. As you can see by the pie chart above, the insiders have a vested interest in GameStop succeeding. What can also be seen on the chart is the dates on the left which show sales of the boards shares and the last sale from GameStop insiders was 06/24/2021. Source 1 - NASDAQ Source - https://www.nasdaq.com/market-activity/stocks/gme/insider-activity Source 2 - https://www.secform4.com/insider-trading/1326380.htm This document is meant to be read in its entirety. Not cherry picked for information. Page 37 11. The Board of Directors receive compensation based on the GameStop average price from the 30 trading days preceding the annual shareholder meeting (example from source: April 27th to June 8th). Based on the current-to-date average closing price of GME, director's will receive ~1,109 shares of GameStop stock as their annual compensation. Source 1 - https://www.reddit.com/r/wallstreetbets/comments/nq5zj0/gamestop_board _of_directors_compensation_june_1st/ Source 2 - https://news.gamestop.com/static-files/8f795a88-54a3-4320-b3e2-a2d5f28 be6c4 12. Implementation of a new fulfillment warehouse along with a new warehouse on the way. Source 1 - Operating one in York PA GameStop link - https://news.gamestop.com/news-releases/news-release-details/gamesto p-expands-fulfillment-network-new-facility-york Source 2 - New one in Reno NV GameStop link - https://news.gamestop.com/news-releases/news-release-details/gamesto p-continues-expansion-fulfillment-network-new-facility 13. Same day delivery for competition like Amazon. Say a computer part breaks, you're most likely up and running the same day. Source – This one is hard to prove but there’s lots of posts throughout Twitter and Reddit about same day delivery being utilized. What is also possible is that they’re creating a shipping distribution network using their existing stores as hubs for distribution to local purchases. DoorDash or GameStop workers are then used to get the goods from the store to you. However, this may not be available to all yet because of the distribution and location of GameStop stores. Best way to find out? buy something and find out for yourself ;p This document is meant to be read in its entirety. Not cherry picked for information. Page 38 14. GameStops are busier than normal according to the GameStop subreddit and employees complaining. Source 1 – https://GameStop.gcs-web.com/node/19566/html Earnings for quarter year over year have increased. Source 2 - Going to a GameStop - https://www.reddit.com/r/GME/comments/reio23/line_up_outside_gamesto p_chinook_mall_yyc_guy/?utm_medium=android_app&utm_source=share Source 3 - Standing out in front of GameStop (This is probably because of PS5 release) - https://www.reddit.com/r/Superstonk/comments/rijl7m/current_situation_at _gamestop_dying_brick_and/ Source 4 - GameStop line (This is probably because of PS5 release) - https://www.reddit.com/r/Superstonk/comments/rik205/long_line_of_custo mer_at_local_gamestop_store/ 15. Established new offices in Seattle, Washington and Boston, Massachusetts, which are technology hubs with established talent markets. Source – https://gamestop.gcs-web.com/node/19566/html 16. Ended the period with cash and cash equivalents of $1.413 billion as well as no debt other than a $46.2 million low-interest, unsecured term loan associated with the French government’s response to COVID-19. Source – https://gamestop.gcs-web.com/node/19566/html 17. Secured a new $500 million ABL facility, which closed in November just after the end of the third quarter, with improved liquidity and terms, including reduced borrowing costs, lighter covenants, and additional flexibility. Source – https://gamestop.gcs-web.com/node/19566/html This document is meant to be read in its entirety. Not cherry picked for information. Page 39 18. Accepting Crypto. Both companies are doing this through a third party. Quoting another redditor - Just as an FYI: “GameStop already accepts crypto as payment in their stores. They have joined the Flexa network and it is possible to pay for your in-store GameStop purchase with a wide selection of crypto. If you want to purchase something at GameStop with crypto, you will need to either use Gemini Pay or Spedn.” Source - https://www.reddit.com/r/Wallstreetbetsnew/comments/mkvyen/comment/g tjbzwm/?utm_source=share&utm_medium=web2x&context=3 Source 2 - Backing up the flexa and shiba coin now supported. - https://forkast.news/shiba-inu-coin-accepted-gamestop-lowes-gemini-flexa / 19. Partnership with Microsoft. Currently, GameStop shares a partnership with MicroSoft. This is a multiyear endeavor which will allow GameStop to grow with MicroSoft’s help. We will also add that there is a partnership in regards to the xbox console allowing GameStop to have the majority of consoles delivered to them to be sold to their consumer base. Currently, we have zero source on the Xbox partnership on distribution of product but have reached out to investor relations for information. We have not heard back as of yet. Source 1 - https://www.reddit.com/r/Superstonk/comments/rp1jq7/microsoft_partners _with_gamestop/?utm_medium=android_app&utm_source=share Source 2 - https://news.microsoft.com/2020/10/08/gamestop-announces-multiyear-str ategic-partnership-with-microsoft/ Source 3 XBOX PARTNERSHIP- Currently, this is not sourced and we are waiting to hear back from investor relations or someone that can find this information. It is believed that this information was talked about from a manager at GameStop but this information could not be found. Source 4 - https://twitter.com/DOMOCAPITAL/status/1368073923313729536?t=_z9H qn7wvO4_uYtdZ1fSqA&s=19 This document is meant to be read in its entirety. Not cherry picked for information.