Connection between GME and AMC?

Because they were both shorted heavily beyond their available shares

Capital markets are the world’s largest and longest lasting perpetual fundraiser. There’s a reason companies go public, they reach their debt ceiling and can no longer service it when the banks call. The security/collateral is the company itself, as the notes are convertible into equity in the event of default

Know the above, everything beyond that is finding the right market(what demo will buy the securities and at what price point). In the long run, all shares are bags

quote:

---

the notes are convertible into equity in the event of default

---

No they’re not. That would be incredibly stupid for the lender—that would put them in a worse position in bankruptcy. They’re convertible into equity upon a qualified financing event (like a later equity financing round or an IPO).

Why do you think they're called SECURITIES? What exactly do you think they're securing? Go do some diligence on an old IPO for a blue-chip like AMZN. If you actually read through the financials, you'll realize the companies aren't profitable prior to going public

Rather than going back and forth on bs, let's get down to reality. Why would any business owner/board take their company public?

If you're looking to divest and it's profitable, any number of private investment/prospective business owners will take it off your hands @ future earnings FMV. And you don't have to deal with SEC regulations/potential for the shares to devalue over a slow, drawn out liquidation

If you need capital, go to a bank or look into private equity

So that pretty much leaves: You only go public if you have no other option. And to be in that position, you must already owe the banks so much that they're willing to force your hand to cover their own position

quote:

---

Lots of reasons. As you do mention, for capital raising or for an exit for existing investors. An IPO can sometimes be more advantageous than other financing options, especially for later stage companies who have a huge cap table. Typical shareholder agreements provide for what happens in the event of an IPO, so all the work for socializing the idea to investors has been done. Later stage companies might have a massive valuation that makes them less desirable for PE investors because they can’t buy the entire company. This is the case for one of my clients right now. That doesn’t mean that they’re not profitable.

---

To summarize: It's because I've reached my debt ceiling and the only remaining option is playing what amounts to a confidence trick on those that are either wreckless or too trusting with their money

quote:

---

No, you go public if it’s the best option.

---

Correct. And it's the best option when it's the only option

quote:

---

Not the case with my clients.

---

Ok, let's play a game. Find me ANY IPO's registration statement and let's break it down. I won't choose the company because that would be too easy. You're the one that is claiming they're profitable, so find me one. And we can analyze their long-term outlook without the injection of the cap via selling stock

Edit: I should clarify, I understand the reasons for markets to exist. It reallocates potentially wasted resources (excess capital that people only save because it's unnecessary for life expenses) and puts them to work, which at times sustain industries that are for the greater good. But how it's done and the bs associated with it is irritating. But I suppose it did play a large part in defeating communism

People invest because of potential growth, which can exist even if a company is not currently profitable.

quote:

---

the only remaining option is playing what amounts to a confidence trick on those that are either wreckless [sic] or too trusting with their money

---

I’m sure early investors of Google, Apple, Coca Cola, Nike really feel hoodwinked by those con-men!

quote:

---

And we can analyze their long-term outlook without the injection of the cap via selling stock

---

Why would we do that?? “Let’s see how this company does with no investment!!” Of course investments help companies grow—and that’s also the case for private investments.

I never said all or even most companies that go public are profitable, but as an investor, if I think a company will be profitable, I’d like to invest early on when they are not so I can get the best price for my shares.