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GameStop (GME) Shareholders Await DRS Results For The First Quarter

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GameStop (GME) Shareholders Await DRS Results For The First Quarter

(CTN News) – In the first quarter of 2018, approximately 25% of GameStop’s outstanding shares were registered directly in the names of their owners, rather than using brokers and dealers to register them.

  • The adoption of the DRS has led to a decrease in the liquidity levels in GameStop’s stock, since short sellers have been prevented from shorting the company’s stock.

What is the DRS and how does it work?

GameStop’s (GME) – Get Free Report retail shareholders have enthusiastically adopted the practice of using the Direct Registration System (DRS) in recent years, and the practice has become a widely accepted practice.

The DRS allows investors to hold their shares through the company’s transfer agent, Computershare, which is the company’s transfer agent. As a result, the requirement to entrust shares to a broker or to possess a physical stock certificate is no longer necessary, as it once was.

By contrast, when individuals allow brokers to take care of their shares, they will be kept under the brokerage’s “street name,” rather than the name of the investor. This stock may then be lent by brokers to short sellers who need access to the stock of the company against which they are placing a bet.

There is a quarterly growth in GameStop’s DRS numbers

During GameStop’s first-quarter earnings report, it was revealed that 76.6 million shares were held by registered owners through Computershare, according to the company.

Taking this into account, it can be estimated that around 25% of GameStop’s outstanding shares were held by the transfer agent as of June 1. Furthermore, it represents an increase of approximately 600,000 shares from the previous quarter as well.

It is likely that GameStop is one of the companies with the most outstanding shares registered with its transfer agent among those that have outstanding shares. According to management, this information has been considered “material” since October 2021 and has been included in the company’s quarterly filings.

What should shareholders expect from Q2 earnings?

A change was made to GameStop’s quarterly filing last quarter for the first time since October 2021.

As a result of this change, Computershare may be able to provide more transparency regarding the number of shares held by it relative to the traditional brokerage model, which utilizes the Depository Trust & Clearing Corp. (DTCC).

GameStop’s retail shareholders’ engagement on social media platforms such as Reddit is evidently driving this trend.

Despite a few exceptions, such as the month when GameStop’s retail shareholders began using the DRS, GME’s trading volume has fallen dramatically every month since GameStop’s retail shareholders began using it.

As a result of the relatively low availability of shares on the market for brokers and banks, this lack of liquidity has served as a brake on sharp drops in the valuation of the company during periods of macroeconomic uncertainty.

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