Clarifying Share Recall - What is it and how does it work?

DISCLAIMER: I am not a financial advisor nor a lawyer, and I'm definitely not your lawyer I am in law school though. Please don't take my words for gospel and question everything you read in this post. If I'm wrong, which is entirely possible, please correct me. Seriously, we will all benefit from it. Our power lays in the collective brainpower that we amassed over here and it's honestly beautiful to see. But IMHO, we should all question everything we read and do our own DD and research.


Alright retards, listen up

I'm seeing a lot of you talking about GameStop potentially recalling shares and how it would skyrocket our beautiful shiny rocket into Andromeda. Share recall would knock the fuck out of short sellers, as they would be forced to close their positions. I think we all know what would happen next 🚀🚀🚀

While this scenario is pretty much the dream come true, I'm afraid this assumption is a little off. I got caught up in the hype in some comment section as well. Before you call me a shill, bear (bull?) with me.

Here's how recalling company's shares work: the lender of the shares requests the borrower to return the shares, this is done automatically these days. Interactive Brokers has a special system for it, the DTCC has Stock Loan Recall Messaging, etc - you get the idea.

Oh wait, the lender of the shares initiates the recall? Not Papa Cohen?

Yup. Source

Furthermore, the recall procedures are regulated through Securities Lending Agreements between the lender and the borrower. Thus, the practices may differ depending on the broker that lends the shares (Source: Jeremy Meade, RMA Best Practices for Recalls and Buy-Ins). If the borrower disagrees with the recall or its terms, he can start a dispute and potentially prolong the process (same sauce)

I know, I know. You don't like this. Me neither. Bull with me.

So GameStop cannot initiate the stock recall on its own, right? But can they ask the lender to initiate it?

Clarifying Share Recall - What is it and how does it work?

Yup! It actually happened last year. Check this article.


Kinda

In this case, the attempt was not successful, as Fidelity, Blackrock, Vanguard, State Street Corp and others decided to keep the shares on loan.

Would it be successful now? I have no idea, I'm new to investing and I don't know the intricacies of this business. I'm trying to learn with an open mind. I think they would need a very strong reason to recall the shares for the vote, like a merger or voting for Cohen as a CEO? Or can he just take over with his big dick energy?

Edit 1: It was a year ago, though. The situation now is a little different and some of the players that declined it last time now have a stake in GME going to the moon

Okay - so the Share Recall might be a little difficult, what's next? Rocket ain't launching? Apes not strong together anymore?

Nah! Papa Cohen can do many more things that could ignite the rocket!

I like the idea of issuing a dividend! This way, shorts r more fuk, we got more bananas for an extra share, the wider public gets the info that the company's doing well and the long whales, clears throat, the long whales could use this legitimate reason for momentum and send this shit into the stratosphere.

Other ideas? Stock split? I'll take that!

Thoughts

Guys, I know that this post might be a little disappointing for some of you. However, as I mentioned in the disclaimer, I urge everybody to do their own research and poke holes in stuff you see here. Why? Because I might be fucking wrong! I'm new to investing, but I'm not new to reading boring legalese. If I'm wrong, please correct me! As I mentioned, we have a tremendous collective brainpower here, let's put it to work and not make an echo chamber (I like the hype posts and memes, though!)

I think that skepticism, being level-headed and discussion are good for us. Peer-review is a fundamental part of any academic research

Before you call me a shill, you might as well check my post and comment history beforehand and see that I'm not. This is my first DD and English is not my mother tongue, be easy on me lol. I want to say hi to all apes, but especially to Polish and Dutch ones, I'm a Pole in a beautiful country that had probably the first squeeze/bubble ever

Position: mid-XX at 10X