All the credit goes to u/Region-Formal who is a cool kid.

10. Summary

• Section 14(a), Rule 8 of the Securities Exchange Act of 1934 empowers eligible individual investors to submit Shareholder Proposals to the Board of Directors of a company
• The rule gives several reasons for a company to request such a proposal to be excluded, however the default is to include these and thus most pass through the screening process
• In that case, companies are obliged to put the Shareholder Proposal to a vote by the entire shareholder body, either at its annual meeting or in GameStop’s case by calling for a special meeting
• Companies almost invariably recommend for such Shareholder Proposals to be voted against, even very meritorious ones, as that has become the standard business approach for dealing with them
• GameStop is likely to follow a similar approach and advocate voting against any Shareholder Proposals, especially if it is one that could potentially be seen as opposing SHFs
• However privately they may well be in strong favour of such proposals, and only going with the grain so as to prevent lawsuits, as has occurred in similar past situations with other tickers
• Indeed, some of the twitter messages by Ryan Cohen himself could, in my opinion, be taken as a call for individual shareholders to carry out actions that are beneficial for the company
• Shareholder Proposals could become extremely powerful when more than half of shares outstanding have been directly registered, either by Insiders or by retail DRSing
• At that point, any shareholder vote is tipped in favour of these two types of investors, as they would form the majority of those eligible to cast votes
• In GameStop’s case, current rates of DRSing could mean more than 50% of shares outstanding are owned by Insiders and Retail in the next few weeks and months
• There are several actions that GameStop could carry out to instigate MOASS, however their management may be reluctant to do so for fear of litigation by SHFs
• On the other hand, a Shareholder Proposal could be put to a vote by the shareholder body, and if receiving majority support compel GameStop to action without litigious accusations being possible
• If such a proposal is advocating steps such as issuing an NFT dividend or NFT-based spin off, it is my opinion that inacting these provide the greatest probability of triggering MOASS
• Therefore an individual investor may, by putting forward an appropriate Shareholder Proposal in the near future, set off a chain reaction that eventually leads to SHFs’ positions being force closed
• Hence using the power of Rule 14a-8 and DRS, a solitary individual investor – one single Ape – could perhaps fulfil Ryan Cohen’s rallying call to “ask what you can do for your company”, and themselves become the catalyst for MOASS…

~ * ~ * ~ * ~

**TLDR:**There is an SEC rule – Section 14(a), Rule 8 of the Securities Exchange Act of 1934 – that enables ordinary shareholders to advocate something called a Shareholder Proposal. The rule is very well defined, in terms of the scope of who is permitted to make proposals, and the extents to which companies are allowed to dismiss or accept such proposals. Should such a Shareholder Proposal be within the defined scope of the rules, the company is compelled to put the proposal to all shareholders to be voted on.

It is my belief that Rule 14a-8 could become pivotal sometime in the near future, when the number of shares directly registered exceeds half of shares outstanding. At that point, utilising the SEC’s Rule 14a-8, individual* shareholders can make proposals which the company’s operational management possibly cannot themselves advocate or inact, for fear of litigation by SHFs and other nefarious actors. Hence when greater than 50% of shares outstanding are DRSed, individual* shareholders may have the power to do what GameStop’s management is perhaps unable to do themselves: instigate a chain of steps that leads to MOASS.

(* note the emphasis on individual, as it truly is only individual investors that can make such Shareholder Proposals under Rule 14a-8)

(Firstly let me acknowledge that there will be many members of this sub who know about this rule already. It has been brought up in the past before, although I believe not necessarily within the scope of what I am going to detail in the latter sections of this DD. However, if you are familiar with the finer workings of the rule, feel free to skip to section 4 below.)

Buried within the SEC’s Securities Exchange Act of 1934 is the following rule:

§ 240.14a-8 Shareholder proposals

https://www.sec.gov/divisions/corpfin/rule-14a-8.pdf

If you have the time, I would encourage reading it rule in full, as the entire basis of this DD is the finer details of this rule! However as it is very lengthy, below are the most important points to understand the gist of the rule:

What is a proposal? A shareholder proposal is a recommendation or requirement that the company and/or its board of directors take action, which is intended to be presented at a meeting of the company’s shareholders to be voted on. The proposal should state as clearly as possible the course of action that the person making the proposal believes the company should follow.

Who is eligible to submit a proposal? A shareholder who has continuously held:(A) At least $2,000 in market value of the company’s securities entitled to vote on the proposal for at least three years; or(B) At least $15,000 in market value of the company’s securities entitled to vote on the proposal for at least two years; or(C) At least $25,000 in market value of the company’s securities entitled to vote on the proposal for at least one yearAdditionally, the person must make themselves available to meet with the company (in person or through teleconference) within a month of submission. They must also be available to attend a Shareholders Meeting to detail the proposal to the rest of the shareholders (again in person or through teleconference).

How does one prove such ownership? Submit a statement of ownership from a broker or bank. Of course the most secure proof of ownership, I believe, would be such a statement from ComputerShare.

Can a group of shareholders submit such a proposal? No, as it is not permitted to aggregate holdings with those of another shareholder or group of shareholders, to meet the requisite amount of securities necessary to be eligible to submit a proposal.

How long can the proposal be? No more than 500 words. Accompanying linls and images are not counted towards the word count.

How many proposals can be submitted? No more than one per shareholder.

When can a proposal be submitted? 120 days or earlier from the expected annual proxy statement. GameStop’s proxy statement in 2022 was released on 22nd April 2022. Therefore the next proxy statement is likely to be made on 22nd April 2023. 120 days before this is 23rd December 2022, thus this is the deadline for making a Shareholder Proposal for inclusion in next year’s Shareholders Meeting.

So the earliest such a proposal can be voted on is next June’s Shareholders Meeting? In fact, GameStop’s By-Laws appear to leave this open. Senior management can call for a special meeting, presumably at which shareholder voting can take place including Shareholder Proposals, at any time:

https://www.sec.gov/Archives/edgar/data/1326380/000132638017000012/ex321_fifthamendbylaws.htm

^{Section 3: Special Meetings. Except as otherwise required by law, a special meeting of the stockholders of the Corporation may be called at any time by the Chairman of the Board or the Chief Executive Officer or by the Board pursuant to a resolution adopted by a majority of the then authorized number of directors. Any special meeting of the stockholders shall be held on such date, at such time and at such place within or without the State of Delaware as the Board or the officer calling the meeting may designate. At a special meeting of the stockholders, no business shall be transacted and no corporate action shall be taken other than that stated in the notice of the meeting.}

Who will decide whether to include proposal in the Shareholders Meeting? The basic rule is that such a proposal has to be included, unless the company can show the SEC that it should be excluded for a certain reason.

What kinds of grounds are there for exclusion? Currently there are 9 such reasons the company can give, which are that the Shareholder Proposal is:(1) Improper under state law i.e. in GameStop’s case, this would be Delaware state law, as this is where the company is incorporated(2) Violation of law i.e. breaching Delaware or Federal law, if enacted(3) Violation of proxy rules, which are the SEC rules the company has to follow for submitting proxy statements(4) Personal grievance; special interest i.e. if benefiting the individual only, and not shareholders at large(5) Relevance i.e. only affects less than 5% of the company’s business or revenue(6) Absence of power/authority i.e. calling for something the company cannot directly effect, and thus out of the company’s control(7) Management functions i.e. affects the company’s normal business operations in a disruptive manner(8) Director elections i.e. results in a change to the make-up of the board(9) Conflicts with the company’s own proposal i.e. directly goes against a proposal by the company in the same area

Couldn’t a company use number (7) above to get most proposals excluded? The SEC has put out a bulletin clarifying the scope of this:https://www.sec.gov/corpfin/staff-legal-bulletin-14i-shareholder-proposals

To cut a long story short, this bulletin explains that a company’s Board of Directors knows best how a proposal could negatively impact a company’s ability to conduct day-to-day operations. Thus, they must explain in more detail what operations would be affected to the SEC. It is then up to the SEC to make a decision to exclude the proposal or force the company to put it to shareholders.

Can a shareholder appeal if it is decided a Shareholder Proposal can be excluded? Yes, an appeal can be submitted to the SEC explaining why the decision is unfair, and a further review will be carried out.

One final note is that the SEC proposed some amendments to Rule 14a-8 on July 13th, which would also allow exclusion of a proposal for the following additional reasons:

https://www.morganlewis.com/pubs/2022/07/secs-proposed-rule-14a-8-amendments-further-signal-support-for-inclusion-of-shareholder-proposals-in-proxy-statements

(10) Substantial Implementation i.e. if the company has already enacted most of the proposal already

(11) Duplication i.e. if multiple proposals are basically advocating the same thing, then only one can be put forward to shareholders

(12) Resubmission i.e. if the same proposal was made and voted against in the previous 3 years

These amendments to the rule are open to comments to the SEC from September 12th to October 12th, and potentially enacted some time after that period.

Firstly I want to show you what a Shareholder Proposal can look like. Below is one that was submitted by Mr. Gregory M. Shepard of Bradenton FL., one of the investors in a company called Donegal Group Incorporated. In this example, he is advocating to the wider shareholder body that Donegal seeks the services of an investment bank, to explore M&A options for the company:

https://www.sec.gov/Archives/edgar/data/1065833/000119312512458062/d434816dex71.htm

Below is a very typical Proxy Statement including a summary of several Shareholder Proposals, this example being from Johnson & Johnson’s Proxy Statement from June 2022:

https://www.sec.gov/Archives/edgar/data/200406/000020040622000026/a2022jnjproxy.htm

You will notice that Johnson & Johnson’s board has recommended that shareholders vote in favour of all their proposals, and vote against all the Shareholder Proposals. In conducting the research for this DD, I looked at proxy statements by a large number of companies, and saw this was very typical. This included many proposals that to me looked very sound and sensible, such as some of those submitted to Johnson & Johnson above. For example, in the May 2022 Proxy Statement by McDonald’s:

https://www.sec.gov/Archives/edgar/data/0001018724/000110465922045576/tm223357d6_defa14a.htm

This 2021 Proxy Statement by Microsoft:

https://www.sec.gov/Archives/edgar/data/0000789019/000119312521301148/d242867ddefa14a.htm

In fact, I searched through hundreds of Shareholder Proposals to corporations of various sizes, and could not find a single instance where the company recommended voting in favour of the proposal. It appears to me that the standard business practice of publicly listed firms in the United States is, in fact, to advocate voting against Shareholder Proposals as basically a “default” response. I have a theory as to why companies follow this seemingly standard approach, which I will explain in Section 4 of the DD.

Finally, I would like to give you a flavour of what kinds of topics individual shareholders typically put up for Shareholder Proposals. For the past few years, the Columbia Business School’s blog – ‘The CLS Blue Sky Blog’ – has published an annual summary of Shareholder Proposals in that year’s “Proxy Season”. Below is some interesting information about the most common types of proposals put forward by individual shareholders earlier this year:

https://clsbluesky.law.columbia.edu/2022/07/29/gibson-dunn-discusses-shareholder-proposal-developments-for-the-2022-proxy-season/

As you can see, the majority of proposals this year and last year have been around ESG (Environmental,  Social & Corporate Governance) related topics. I believe this is primarily because most Shareholder Proposals are made to large megacap firms in the S&P 500, and these are the kinds of topics advocated by shareholders of such companies in recent times. However that is not to say that other types of proposals cannot be put forward, such as in relation to business strategy and even a company’s stock e.g. the one made above by Mr. Shepard to Donegal Group Incorporated.

Lastly, note that I checked through all the Proxy Statements of GameStop going back to when it first IPOed. As far as I could tell, there has never been a Shareholder Proposal put forward to be voted on by the larger shareholder body. I also looked through those of several other companies described by some as “meme stocks”, and found that to also be the case for those, with some rare exceptions. Where such Shareholder Proposals did make it to a vote, the topics covered were fairly mundane e.g. almost exclusively ESG related.

The same Columbia Business School blog shared in the previous section – ‘The CLS Blue Sky Blog’ – also contains valuable data on this topic:

https://clsbluesky.law.columbia.edu/2022/07/29/gibson-dunn-discusses-shareholder-proposal-developments-for-the-2022-proxy-season/

Hence this year exactly half of the Shareholder Proposals put forward made it to a vote, with an average 30.4% voting in favour. Overall, only 6% of Shareholder Proposals gained majority support, which sounds like a rather low figure. However it should be noted that the vast majority of these proposals are made by retail shareholders of stocks that have very high institutional ownership. For a stock with very high levels of retail ownership, and an unprecedented proportion of that being direct registrants, my conjecture is that positive voting is likely to be higher than the 30.4% average even now…

Of course in order to make it to a shareholder vote, such proposals need to first pass through the screening carried out by the company. The data on the “no action” requests made to the SEC, meaning asking for the Shareholder Proposal to be excluded from voting, is also interesting to note:

Seemingly companies only seek to have about a third of Shareholder Proposals rejected. This year the SEC then actually agreed in favour of the company’s view in only 38% of cases, a sharp decline from 2021. So it appears to me that a firm minded shareholder, who sticks to their guns and does not withdraw their proposal after making the initial submission, actually has a good chance of having their Shareholder Proposal being heard and then voted on by the general body of shareholders.

https://www.nytimes.com/roomfordebate/2010/11/15/investing-in-someone-elses-lawsuit/more-money-into-bad-suits

“The United States spends about 2.2% of its Gross Domestic Product, roughly $310 billion per year, on litigation.”

– New York Times, 16th November 2020

In such a climate, is it any wonder that corporations are naturally wary of making decisions or carrying out actions that can be construed as potentially litigious? Certainly any potential misstep – or even a well thought out business decision that could be seen as controversial – has the potential to quickly result in lawsuits. An example is the just filed Securities Class Action that I reported to the sub over the weekend, against Ryan Cohen and another company he recently had (has?) an interest in:

(Note: This post was removed with the reason given being overly related to that other company. If you are interested to learn the details, see my post history.)

In section 2, I shared my finding that corporations invariably recommend for Shareholder Proposals to be voted against. I conjecture the reason for this is threefold. The first being that recommending a vote for a proposal could be interpreted as company management not doing their jobs well and coming up with these ideas themselves. However the second reason, I believe, is that recommending a vote for a certain Shareholder Proposal could result in adverse knock-on effects.

Companies take many months of careful and considered planning for each of the proposals they themselves include in Proxy Statements. The strategies and actions advocated would typically be analysed and re-analysed by an army of lawyers, to determine all the potential blowback and how those could be dealt with. Hence to recommend voting for a Shareholder Proposal would, in most cases, be seen as an unnecessary risk without carrying out similar due diligence.

The third reason, I believe, is the danger of setting a precedent that a company may then feel they must follow going forward. For example, if advocating in favour of a certain type of Shareholder Proposal, they may then feel pressurised if a similar propoal is put forward in the following years. Therefore however meritorious a certain Shareholder Proposal may be, from a risk management perspective it still makes more sense to revert to the default and recommend a vote against.

The fourth and final reason I could think of is simply the danger of going against the grain of how Corporate America operates. As the default appears to be for companies to always recommend voting against Shareholder Proposals, to follow a different approach would do more than just raise a few eyebrows. This in combination with the other reasons outlined above means the risks, including those of Securities Class Action Lawsuits, makes it almost impossible for corporations to recommend voting for even the most sensible Shareholder Proposal.

For the reasons explained in the previous section, it is my firm belief that any Shareholder Proposals put forward to GameStop would be met with the same outcome: a recommendation to vote against. Even if a certain proposal is advantageous for the company if enacted, undoubtedly the recommendation would be for a vote against. If that proposal specifically is to help the company shed the shorts, especially for that very reason, the strength of recommendation against would undoubtedly be even louder than usual. That is entirely to be expected, of course, as GameStop showing favour to such a proposal would result in a list of lawsuits as long as Kenny’s nose at a Congressional Hearing.

One need only look at past attempted directed interactions by individual shareholders to GameStop, to see how carefully they are treading. Some of you may remember me publicising at the end of last year the actions carried out by u/jasonwaterfalls96, in his attempts to have GameStop release the vote count from the 2021 Shareholders Meeting. His litigation action of course ultimately failed, following months of GameStop avoiding all attempts of cooperation with the information requested.

https://www.reddit.com/r/Superstonk/comments/qoq6c2/could_ujasonwaterfalls96s_legal_action_against/

More recently, numerous shareholders have reached out to GameStop’s Investor Relations department, regarding the errors by brokers and the DTCC in distributing the stock split in the form of a dividend issuance. As far as I am aware, no-one has received a response to an individual attempt at engagement, despite numerous attempts. The company did of course issue a follow-up announcement clarifying and confirming their original issuer event, however not a response to any individual communication. No doubt prior to them even releasing this, the announcement would have been checked numerous times by GameStop’s lawyers, to ensure it was as airtight as possible. And of course, since then…not a peep.

Why the extreme caution? It is almost as if GameStop does not want to take “picking the low hanging fruit” paths towards MOASS. However, thinking logically and reasonably, that is not a surprise at all and entirely to be expected. The more likely a certain trigger event could cause MOASS, the less likely GameStop would be anywhere near it, for the likelihood of being sued as explained above. The manner in which Ryan Cohen and GameStop has operated since this saga began would suggest that they wil continue taking actions that cannot be construed as in support of MOASS.

~ * ~ * ~ * ~

So if I think GameStop would be officially against a Shareholder Proposal that may help nudge MOASS along, why am I writing about this? Well, my sincere belief is still that the interests of both GameStop’s management and GameStop’s retail shareholders are nonetheless aligned: to enable true price discovery, by having naked short sellers close their positions. Even if the company is unable to instigate such a move easily through their own volition, or direct retail towards helping to achieve that goal, I do think that is what ultimately both parties want. And also potentially require each other’s help, in order to turn into reality.

This is where I believe some reading between the Ines is necessary, for what GameStop’s official stance is and what help they want from their shareholders may be quite different. There are two reasons that make me think this, the first being the regular releases in the Quarterly Updates of the number of shares DRSed. Such direct registration is in effect a share recall – something GameStop’s management has not set as a strategic goal for the company. So if they have not called for a share recall, and if they have not directly asked anyone to DRS, then why are they the only company that regularly publishes DRS figures?

The second reason I believe there is more to GameStop’s messaging than what may first meet the eye – and the inspiration for this entire DD and post – is this tweet by Ryan Cohen earlier this month:

Some of you may feel I have misunderstood this tweet, and read far more from it than Papa intended. I respect that opinion but disagree with it and, in any case, feel all potential interpretations should be explored. Ever since he tweeted that message, in my mind it is a signaling that along with the share recall already taking place through DRS, there is more that retail shareholders of the company can do. The most fundamental thing holding GameStop back from where it should be, is the extreme drag caused by the illegal naked shorting and daily criminal manipulation of its stock. If an individual shareholder can take a proactive step to stop the price suppression, personally I know I would love to help Ryan as much as possible!

Before proceeding further, I want to address the thought that some of you may have about the above question. Let’s go back again to the SEC’s eligibility criteria for making a Shareholder Proposal:

https://www.sec.gov/divisions/corpfin/rule-14a-8.pdf

You may not aggregate your holdings with those of another shareholder or group of shareholders to meet the requisite amount of securities necessary to be eligible to submit a proposal.

It is only possible for a Shareholder Proposal to make it to a vote by the general shareholder body if this is put forward by a solitary individual investor. For a company to include a Shareholder Proposal by a group of people would mean the company itself is in breach of regulations, as also detailed in Rule 14a-8. When the Shareholder Proposal is put to the vote, there is nothing forcing individual investors to act in unison, as there is nothing binding retail to act as one body. Hence it is simply out of the question for a Shareholder Proposal to be construed as compelling others to collude with the proposer, as it is simply advocating a vote and not manipulating the stock itself.

Furthermore, Gary Gensler has himself already ruled out the possibility of simply sharing ideas in internet forums, such as the platform you are reading this DD on, as being a form of collusion:

https://www.ai-cio.com/news/gensler-stands-up-for-the-robinhood-gang/

^{Appearing on Jim Cramer’s CNBC show, Gensler said he found no problem with this coordinated investing by the tyro investors. Cramer disagreed, saying all collusion is bad. “If 5 million people decide to smash a hedge fund that’s short, is that OK?” Cramer asked, referring to meme crowd, vis-à-vis GameStop. “What’s within the bounds of what you can do to smash a short seller?”}

^{GameStop is at the heart of the anti-establishment war of the meme investors. They believe the shorts are unfairly attacking the video game seller by undermining its stock price, in a bid to drive the already-troubled store chain out of business.}

^{Although Gensler wouldn’t talk about GameStop specifically, he said there was nothing wrong with individuals reaching out to one another to discuss potential investments and enlist others to adopt their trading ideas. Namely, to bid up heavily shorted stocks and thus hurt hedge funds in a short squeeze.} 

^{“People come on your show and they advocate either to buy or sell a security,” Gensler told Cramer. “Before we had television, people did it on the radio. Now we have various social media platforms.”}

^{Such freedom of communication among disparate retail investors is no sin, Gensler indicated. “That’s not only free speech, but it’s part of what makes our capital markets robust, that people can disagree and disagree using the media of the day.”}

I have conjectured in the previous sections that, at least publicly, GameStop would recommend voting against any Shareholder Proposals put forward by individual investors. One question I had in mind when conducting the research was whether a company’s management team are themselves bound to voting in the manner they recommend in a proxy statement. The question thus becomes whether shareholders votes are fully anonymous, to the extent of concealing all votes including those of Insiders.

There was surprisingly little information I could find confirming one way or the other. Certainly what I can say is that the results of corporate elections are invariably vote totals only, for and against proposals discussed in shareholders meetings. As such I believe this extends to the voting decisions of Insiders as well, and could no precedents of Insiders’ (or anyone’s for that matter) voting decisions being made public by the tabulators of votes, transfer agents such as ComputerShare.

On the actual question of whether Insiders always vote in line with management proposals, again very little information I could find that answers this decisively. However there was a research paper I found –  “Strategic voting and insider ownership” by Blair B.Marquardt, Brett W.Myers & Xu Niu published in the Journal of Corporate Finance, Volume 51, August 2018 – which indicates that this is up in the air. They have stated the following passage, which implies that individual Insiders can vote in agreement of or against their own voting recommendations:

https://doi.org/10.1016/j.jcorpfin.2018.05.002

Alternatively, consider the case where management owned 10.0% of voting shares. Management presumably votes in favor of their own proposal…

This being the case, there could be a scenario where a company’s Board of Directors recommends publicly to vote against a certain Shareholder Proposal, but then proceeds to not follow their own advice and they themselves vote in its favour! With the anonymity which we have established is standard practice for such elections, this becomes a distinct possibility. Hence I believe it is feasible that GameStop’s Insiders vote in favour of a Shareholder Proposal that is aligning with their own interests, such as one that could ultimately lead to true price discovery of the company’s share price.

If my hypothesis is correct, then there could be a scenario where both retail investors of GameStop as well as its management team, have it in both parties best interests to vote in unison for a Shareholder Proposal. However, there is a question mark over the legitimacy of broker-dealer proxy voting, and whether shareholders’ rights would be exercised as per their will. It is my conjecture that the more likely the Wall Street cabal is to be disrupted or even destroyed by the outcome of a shareholder vote, the more likely proxy voting will be criminally manipulated to act against retail.

When, then, could Rule 14a-8 lead to a decisive shareholder vote that tips the balance against short sellers? I believe when it becomes extremely difficult for non-direct registrants to represent the majority of votes cast in a shareholder vote. Directly registered shareholders are Insiders and retail investors whose shares have been DRSed and held by ComputerShare. Therefore it is my belief that when these two groups have stock ownership which represents the majority of shares outstanding, voting against certain types of Shareholder Proposals put forward by individual shareholders may become very difficult for other shareholder groups to effect.

Using the data available at computershared.net, can see that in order to form a majority of votable shares, must be greater than half of shares outstanding at 152 million shares. With 77 million DRSed and 38.5 million held by Insiders for a combined 115.5 million, current progress is therefore slightly under 38% of the way there. Hence even if Insiders do not increase their share count at all, another 37.7 million shares would need to be DRSed to reach more than half of shares outstanding.

Note that in the last month, the DRS total grew by 9.8 million shares. If this rate of direct registration continues, the Insiders+DRSed figure would become greater than 50% of shares outstanding on exactly Christmas Day! The annual shareholders meeting would at that point be a little over six months away. Hence with that same rate of DRSing, could represent even over 203 million shares – 67% of shares outstanding – by that next scheduled meeting. In fact, that would mean that DRSed shares alone would be the majority of shares outstanding, at 54% of the total at current growth rates…

However the Chairman, CEO or Board could call a special meeting at any time before that as well, as I detailed in section 1. So the closer the Insiders+DRSed figure gets to 50% of shares outstanding, potentially the more likely that such a seminal turn of events may take place. Should a valid Shareholder Proposal have been submitted before that point, and assuming an exclusion request to the SEC has been turned down, GameStop would have no choice but to include said proposal with whatever other business or votes the company wants direction from at the special meeting.

Note also that under the terms agreed in mid-2020, RC Ventures can increase ownership from 11.9% to 19.9% of shares outstanding also, which represents another 24.2 million Insider shares. With the current rate of DRSing, it may be possible to get to Insiders+DRSed representing 42% of shares outstanding by about six weeks from now, in mid-October. As unlikely as it may currently seem, Ryan Cohen thus only needs to activate his 8% of shares outstanding buying power at that time, to get to the magic 50% mark.

My point is, a Shareholder Proposal has a chance of being put to a general shareholder vote sooner than it may initially seem. How quickly that could happen is dependent on the rate of DRSing, the potential for Insider ownership to also increase, and the success of a skillfully presented Shareholder Proposal passing through GameStop’s and potentially the SEC’s screening process. Despite the lack of precedent of GameStop’s individual investors having Shareholder Proposals voted on, there is always the first time for everything, in these extraordinary moments the company has bee  through over the last couple of years.

Lastly, let me note that votes undertaken based on Shareholder Proposals are typically non-binding, meaning companies are not forced to action these. However if the result of the vote is decisively in the favour of such a proposal, the Board would have strong grounds to effect the will of the majority of shareholders with less pushback. I believe any actions the company takes which hurts short sellers is likely to face some litigation, similar to what the towel company is undergoing right now. However the greater the majority of shareholders backing a certain Shareholder Proposal, the more the Board will be compelled to act with fiduciary duty on their behalf, and thus less likely to face accusations of attempting to proactively trigger MOASS themselves.

In this final section I consider possible actions that GameStop could take, but their management are potentially unable to carry out without majority shareholder backing, that could trigger MOASS. As I have stated in the title of this section, should such a trigger be the topic of a Shareholder Proposal and favourably voted on in a shareholders meeting, GameStop would have cause to inact it. I will then explore a couple possible trigger mechanisms that GameStop’s Board may be compelled to action, by having an individual investor’s Shareholder Proposal positively backed by the majority of shareholders.

To help me do this, I will turn to some previous work from earlier this year that I shared on the sub. In the spring I published a series of posts entitled “The Walls are closing in on Wall Street”, which explored various mechanisms that, in my personal opinion, could lead to MOASS. Not all of these are relevant to the topic of Shareholder Proposals, but below are links to those posts in case you are interested to do further reading:

Walls 1 to 9:https://www.reddit.com/r/Superstonk/comments/smjczz/the_walls_are_closing_in_a_comprehensive_look_at/

Update on above:https://www.reddit.com/r/Superstonk/comments/swbyfq/the_walls_are_still_closing_in_an_update_on_9/

Walls 10 to 12:https://www.reddit.com/r/Superstonk/comments/sykuo4/those_walls_just_keep_closing_in_yet_more_ways/

Walls 13 to 15:https://www.reddit.com/r/Superstonk/comments/szil48/more_walls_closing_in_on_the_hedgeturds/

Walls 16 to 18:https://www.reddit.com/r/Superstonk/comments/t3t7as/walls_closing_in_on_hedgies_part_5_another_three/

Some of these “Walls” are market mechanics that GameStop has no control over. Others are connected to stricter regulatory enforcement that could lead to SHFs being forced to close their naked short positions, again not something GameStop has direct control of. So far none of these has turned from theory into reality, of course. That potentially indicates that SHFs are still in a position to manipulate either the market or enforcement agencies, so as not to be susceptible to these possible kinds of triggers of MOASS.

However a few of these “Walls” are business actions that GameStop can themselves undertake which can hurt SHFs, and there are of course likely others I have not identified. It is my belief that a couple of these, in particular, could lead eventually to a high volume of short positions being closed, including through forced closing i.e. SHFs failing margin calls. These two are:

As I said, there could be other potential trigger events, but it is my firm belief that NFTs have the power to destroy the SHFs, in ways like no others. However due to this very fact, it can be very difficult for GameStop themselves to carry out business actions specifically aimed at addressing the naked shorting of its stock. As we saw with the Overstock case, their issuance of a digitalised dividend resulted in multiple lawsuits, that took great time and effort to finally be resolved. Those legal battles did set an important precedent for future similar actions by corporations, however, which I flagged to the sub last year:

https://www.reddit.com/r/Superstonk/comments/ptvq89/the_overstock_court_ruling_in_utah_yesterday/

Although GameStop may thus have important cover due to this ruling, in the event of utilising NFTs to shed the shorts, no doubt lawsuits will still likely be filed by accusatory bad actors from Wall Street and beyond. However this is where I believe the power of a Shareholder Proposal, raised by a single individual investor but that has the backing of the majority of shareholders, would add undeniable legitimacy to carrying out such actions. If a Shareholder Proposal calling for an NFT dividend or an NFT-backed spin-off receives overwhelming support, GameStop’s management would have a fiduciary duty to action this, in my opinion.

This is why I believe a solitary retail investor could, by using the rights afforded to them by Rule 14a-8, be the catalyst for MOASS. By submitting a Shareholder Proposal that passes with majority support, GameStop would be compelled to action what could be a trigger for SHFs closing their short positions. Therefore I really feel that a combination of using Wall Street’s own rules against them, and the steady “takeover” of shares outstanding through DRS, can set up the perfect endgame. And as I outlined in Section 8, the timeline for effecting this could be a mere weeks or months away.

Of course MOASS could happen through a myriad of other “Walls”, including before 50% of shares outstanding are directly registered. But this is the only approach within the power of any single one of you to enact. Not financial advice, but YOU could therefore truly be the catalyst for MOASS…

• Section 14(a), Rule 8 of the Securities Exchange Act of 1934 empowers eligible individual investors to submit Shareholder Proposals to the Board of Directors of a company

• The rule gives several reasons for a company to request such a proposal to be excluded, however the default is to include these and thus most pass through the screening process

• In that case, companies are obliged to put the Shareholder Proposal to a vote by the entire shareholder body, either at its annual meeting or in GameStop’s case by calling for a special meeting

• Companies almost invariably recommend for such Shareholder Proposals to be voted against, even very meritorious ones, as that has become the standard business approach for dealing with them

• GameStop is likely to follow a similar approach and advocate voting against any Shareholder Proposals, especially if it is one that could potentially be seen as opposing SHFs

• However privately they may well be in strong favour of such proposals, and only going with the grain so as to prevent lawsuits, as has occurred in similar past situations with other tickers

• Indeed, some of the twitter messages by Ryan Cohen himself could, in my opinion, be taken as a call for individual shareholders to carry out actions that are beneficial for the company

• Shareholder Proposals could become extremely powerful when more than half of shares outstanding have been directly registered, either by Insiders or by retail DRSing

• At that point, any shareholder vote is tipped in favour of these two types of investors, as they would form the majority of those eligible to cast votes

• In GameStop’s case, current rates of DRSing could mean more than 50% of shares outstanding are owned by Insiders and Retail in the next few weeks and months

• There are several actions that GameStop could carry out to instigate MOASS, however their management may be reluctant to do so for fear of litigation by SHFs

• On the other hand, a Shareholder Proposal could be put to a vote by the shareholder body, and if receiving majority support compel GameStop to action without litigious accusations being possible

• If such a proposal is advocating steps such as issuing an NFT dividend or NFT-based spin off, it is my opinion that inacting these provide the greatest probability of triggering MOASS

• Therefore an individual investor may, by putting forward an appropriate Shareholder Proposal in the near future, set off a chain reaction that eventually leads to SHFs’ positions being force closed

• Hence using the power of Rule 14a-8 and DRS, a solitary individual investor – one single Ape – could perhaps fulfil Ryan Cohen’s rallying call to “ask what you can do for your company”, and themselves become the catalyst for MOASS…