jackofspades123

This is heavily inspired by Consistent-Reach-152

Background

GME Certificate Of Incorporation: https://www.sec.gov/Archives/edgar/data/1326380/000132638022000080/a31-certificateofamendment.htm

• There is no mention of fractional shares

Truck Hero, Inc Certificate Of Incorporation: https://www.sec.gov/Archives/edgar/data/1648189/000119312515346140/d17828dex31.htm

• There is a mention of fractional shares

Delaware Code: https://codes.findlaw.com/de/title-8-corporations/de-code-sect-8-155.html

• If fractional shares are not mentioned in the by laws, then there are no fractional shares

JP Morgan: https://www.sec.gov/divisions/investment/noaction/2016/jpmorgan-041416-206(3)-incoming.pdf

• Fractional shares are not issued by the issuer but rather are account entries meant to represent the portion of a whole share (held by a broker or another party) that an accountholder would be entitled to (including ongoing appreciation and depreciation) if fractional shares existed and could be traded in the marketplace.

SEC: https://www.sec.gov/oiea/investor-alerts-and-bulletins/fractional-share-investing-buying-slice-instead-whole-share

• The way you buy and sell fractional shares differs between brokerage firms that provide this service to their customers.
• You may not have voting rights if you own fractional shares. Your ability to exercise proxy voting will depend on how your brokerage firm’s fractional share investing program works. Some brokerage firms allow it, with special procedures, and some firms do not allow it at all. Ask your brokerage firm whether you will have any voting rights associated with fractional share purchases.

While there have been times in the past that GameStop or what would become GameStop have issued fractional shares (ie mergers), those are one offs

Taken together, we get the following conclusions

• Only whole shares are allowed by GME
• Fractional shares are happening between the individual and the financial entity.

"As a result, a beneficial owner's ownership cannot be tracked to specific shares but rather its ownership interest is represented as a securities entitlement at his or her broker-dealer. Each of those beneficial owners don't own the actual shares credited to their account " https://www.sec.gov/news/speech/2007/spch101607ers.htm

There can however be more security entitlements than total shares issued by the company.

I wanted to show a few examples with pictures to illustrate how inexpensive it can be to buy 100 votes

I am going to show pictures of each ticker with me going long 100 shares, short a call, and long a put. The call and put will be for the same strike and the same expiration. At the very end will be a summary table of upfront costs, losses/gains, and then some additional comments.

Please note:

• This assumes no early exercise, which is a risk to this.
• This assumes what is displayed on the ticket can be filled. Technically, it will not fill as optimally, but the gist of this is the key.
• This is all based on data from thinkorswim pulled around 11:30am on 3/30/2023.

Examples

TLDR Summary

• GME: for $2.4k, you can buy 100 votes and you’ll lose is $88
• Robinhood: for $1.1k, you can buy 100 votes and you’ll gain $13
• AMC: for $0.7k, you can buy 100 votes and you’ll lose $138
• Apple: for $16.8k, you can buy 100 votes and you’ll gain $194
• Microsoft: for $27.4k, you can buy 100 votes and you’ll gain $141

For 5 different tickers, this shows how you can shed some or all of your economic risk and have full voting rights. This is empty voting!