u/-Hdvdn-

Considering an options play on RKLB into earnings and wanted to see what this community thinks.

Bull case:
Pretty straightforward. Neutron development milestones, growing launch cadence with Electron, and the space economy tailwinds is going nuts for a while. Institutional interest has been building and any positive surprise on revenue or bookings could make it rip.

Bear case:
The stock already runs into every earnings and then fades once the hype settles. Profitability is still a ways out and they're burning cash on Neutron development. If guidance comes in light the selloff could be ugly.

What's everyone else doing? Are you holding through earnings, have a directional bet, or sitting this one out? Curious what the general sentiment is and if anyone has dug into the expected move from the options chain.

Position: 20 x $80 May 8 calls

Been doing some digging on how the current GME capital structure actually plays out WHEN we get another big move soon, especially with the acquisition news hanging over everything.

First thing worth noting is that Cohen has already publicly announced a transformational acquisition is in motion. The target hasn’t been named yet but he’s been very vocal about it. This matters because in past squeezes GME did ATM offerings to capitalize on the elevated price. With an active deal in negotiation, doing an ATM while sitting on material nonpublic information about a target would be a serious SEC problem. So the dilution playbook they ran in 2024 is likely off the table this time, at least until the deal is public.

Second thing people are sleeping on is that they already have around 9 billion in cash. The whole reason they diluted into every previous run was to build that war chest. The war chest is built. The incentive to dump shares into a squeeze is much lower now.

But here is where it gets interesting with the capital structure stacking up between $29 and $32. The convertible notes convert to shares between $28.91 and $30. That is about 4.2 billion in debt that turns into new shares with zero cash coming into the company. Pure dilution, company gets nothing for it.

Then right above that you have the warrants at $32, expiring October 30 2026. About 59 million shares worth. But these are different because warrant holders pay $32 cash per share, so GME would collect roughly 1.9 billion in fresh capital if fully exercised.

So the warrants do not negate the note pressure. They are a separate layer of dilution stacked right above it. The difference is quality, not direction. Note conversions are dilutive with no benefit to the balance sheet. Warrant exercises are dilutive but cash accretive and actually strengthen the acquisition thesis.

If this runs on acquisition announcement rather than a pure meme squeeze the cash from warrant exercises going into an already massive pile could support a genuine rerating. But if you are just looking at squeeze mechanics, the $29 to $32 range is essentially a wall of new share supply with very little room between each event.

The warrant expiration in October also adds a time pressure element that could accelerate exercise volume if the stock gets into that range before then.

Curious what others think about whether the acquisition announcement itself becomes the catalyst that changes how the market prices through that dilution ceiling.