Part 2 of 6 - An account of events in the mission to DRS GME - DRS discovered

Part 2 of 6 - DRS discovered

GameStop investors discover DRS

Most people generally assume that when shares of a company are purchased through a stock broker that they are then the owners of those shares that they paid for, but this is not actually the case. Shares purchased and held through a stock broker are considered to be “beneficially-owned” which means that the owner of the shares is not the individual that paid for them but actually the central depository of the DTC.

Something that was discovered that was believed would expose this situation was the Direct Registration System (DRS). DRS is an inconspicuous tool that allows shareholders to take shares that they paid for through a stock broker out of the ownership of the central depository and registers those shares in their own name with the issuing company’s transfer agent. The transfer agent of GameStop is Computershare. Computershare provides a helpful breakdown of company share structure.

A central belief and allegation by GameStop investors is that there were more shares of GME purchased by household investors than were actually issued by GameStop, that the network of stock brokers were actually selling “phantom shares”. It was hypothesized then that if this was in fact the true reality, we could prove this by directly registering our shares in our own name through DRS, which would eventually lead to a situation where the number of shares directly registered would ultimately account for all of the shares officially issued by GameStop, which would demonstrate clearly to everyone that there was a significant discrepancy between the number of shares that were officially issued and the total number of shares that existed in the network of stock brokers, claimed by the central depository.

For several months, discussions about DRS bubbled up among GME investors on Superstonk, and eventually around August / September of 2021, despite significant and sustained FUD and opposition that accompanied the idea, a consensus emerged that this was a tool that we could use that would protect our investment and ultimately expose the fraud that has been perpetrated against our company. It was at this time when members of Superstonk began to contact their stock brokers and request that their shares of GME be directly registered in their name with GameStop’s transfer agent Computershare.

Soon afterwards, in GameStop’s 2021 Q3 Form 10-Q, the company reported for the first time their official count of how many shares were DRS’d.

“As of October 30, 2021, 5.2 million [pre-split] shares of our Class A common stock were directly registered with our transfer agent, ComputerShare.”

This was noteworthy because it demonstrated GameStop’s clear awareness of the reality that investors of GME were directly registering their shares, and that there is in fact a significant distinction between shares that are directly registered versus shares that are not. It was undeniable validation that, despite the ever-present FUD that attempted to dissuade us from doing so, that directly registering our shares with DRS was a worthwhile endeavor.

DRSGME.org and increased opposition to the cause

Later, in early 2022, a group of individuals who were active on Superstonk teamed up to build the DRSGME.org website (and eventually the WhyDRS.org website) to educate other investors of GameStop about DRS and to spread the word of DRS to the masses. This team had a fundraising campaign on GoFundMe for the purpose of advertising the newly created website, and enthusiastic GameStop investors that believed in the mission began to donate money to the cause.

But, the ever-present FUD that initially resisted the idea of DRS was now targeting the creators of the website. Despite that the team was fully transparent about the collection of donations and the spending of money on advertising, and that all receipts were made publicly available, aspersions were cast, accusations were made, and one of the co-creators of the website was eventually banned from the Superstonk subreddit, with the justification provided that this individual was spamming comments in posts made in the subreddit.

Who benefited from this? Wouldn’t the largest online community of GameStop investors want to be able to have this team and their efforts present in their community, the largest of all online communities for GameStop investors? Wouldn’t the moderators of this community, who were apparently pro-GME, want to do everything in their ability to support such an effort, the effort to protect our investment and to advance the collective interest of all GameStop investors by uncovering fraud perpetrated against our company?

Interestingly, evidence exists of a conversation that happened on a private Discord channel where one of the current moderators of Superstonk admitted to being a former employee of Fidelity.

Regardless, the DRSGME.org team marched on undeterred. Nobody ever said that uncovering Wall Street’s endless criminality wouldn’t be met with resistance. The mission was not complete. Not too long afterwards, the team eventually started their own subreddit, r/DRSyourGME. It was a small, niche subreddit committed to the unfinished mission.