Paul – per your request, I emailed you questions to your corporate account. These questions are from http://WhyDRS.org and various investor communities online. I believe Kevin will be sending you additional questions based on his specific concerns.

Thanks to everyone who submitted public questions, and to those who helped gather and organize them. For public review, here is what we sent Paul Conn, President, Computershare Global Capital Markets:

Paul,

Thank you for the opportunity to send general DRS questions. We wanted to send along this list of questions and reopen communication. Much of it is similar to the list of questions sent last year, but we've since answered some and come up with plenty of new ones. It was very nice to see you meeting criticism and concerns from some community members head on over the last week, and that's part of why we're reaching out now. We believe that investors choose to levy such accusations and air out their theories because they are passionate about ownership and want to know the truth. These theories can come from a lack of understanding and a drought of good information with strong citation. Hope we can connect and earnestly tackle this situation, and help everyone get to a more learned place. To start, here’s some context as to why investors are so concerned and curious.

We understand that you cannot answer specific questions on individual stocks, but we think it would be helpful to provide you (and others) a little context as to why investors are so concerned and curious before we list the questions. Approximately 25% of GameStop Corp.’s ($GME) outstanding shares have been registered with their transfer agent (Computershare) for over a year now. While it's possible that there is an innocent macroeconomic explanation for this consistently reported number, GameStop investors and all investors who are driven by a desire to own their investment via DRS want to know more about alternative explanations. Investors have noted anomalous trading volume, particularly on or around the dates for which GameStop reports registered shares (DRS and DirectStock plan shares). Most of $GME’s outstanding shares are accounted for by mutual funds, ETF’s, other funds, insiders, and DRS and plan shares, so it’s odd when 20-25% of the outstanding shares trade in a single day (or a couple days). It’s even more curious when the volume spikes near the DRS record dates.

It’s possible these large spikes in volume are related to illegal options trading used to avoid complying with close-out requirements under RegSHO (see August 9, 2013 SEC Risk Alert https://sec.gov/about/offices/ocie/options-trading-risk-alert.pdf). While this is outside the purview of Computershare, there are concerns that a portion of the $GME shares held by Computershare, Computershare subsidiaries, nominees, etc. may be associated with these options trades via lending or as locates. It's with this context in mind that we'd appreciate your weighing in once again and providing some of your thoughts regarding not GME specifically but the ownership nuances within the current system.

You and other industry experts and veterans have provided many hours of your time to altruistically try and meet the needs of a newly emergent base of activated and curious retail investors. However, there is an ongoing confusion and request for clarity and to that end we've prepared an index of terms/definitions in order to confirm we're using industry terms with shared understanding and then several more in depth questions that speak to remaining uncertainties DRS enthusiasts have. Please refer to the Appendix for these terms. We would like to be deliberate about the terms used. Any industry terms should be individually defined in context and in the view of the person using the term.

We’ve gathered questions from several online investor communities. A dialog back and forth discussing the questions and making sure all questions and answers are thorough, in order to address the speculation and concerns of retail investors would be ideal. Considering the recent / ongoing theories and allegations regarding the degree to which Computershare has lagged on providing clarifying information in the investor communities. Answering these questions will put many investors as well as their speculation at ease and show that Computershare is committed to maintaining transparency and investor trust.

Key Questions: Ownership Structure

1. Some investors have started using the term ‘Sole Legal Title’ to refer to an investor who owns shares in their own name exclusively, on the issuer ledger, without any other entities involved (no nominees, no custodians, etc). ‘Pure DRS’ holdings would represent ‘Sole Legal Title’ while owning shares through a Plan or in an IRA with a custodian would not. Is there a better /more official term for this kind of ownership? An SEC bulletin uses the phrase ‘DRS Form’.

2. Who is the named owner on the share ledger for shares held at the DTC for Operational Efficiency? Is it Computershare’s nominee, DTC’s nominee, or someone else? It is understood that the investor will still be listed by name in a subclass.

3. Can you explain in detail exactly how the holding works for Plan shares held at the DTC? Are those shares considered "non-investor owned"? If so, what does that mean exactly? Are non-investor shares mutually exclusive with other holding types? What are the actual account types that CS uses to interface with the DTCC with for DRS purposes?

4. Which of the following descriptions would you say best describes Plan shares held with DTC for operational efficiency purposes: “held by Cede & Co on behalf of the Depository Trust & Clearing Corporation” OR “held by registered holders with the transfer agent”

5. Please clearly describe the location and settlement process for a market order for shares in the DirectStock plan vs a company sponsored DSP (such as DepotDirect). What is different about how these shares, once settled, are recorded on the issuer’s ledger?

6. Can you describe the possible chains of custody and ownership for shares in various holding types including Pure DRS and DirectStock such as: custodians, omnibus bulk owners, nominees, Computershare subsidiaries, including what account types are used to manage each. In addition, could you describe the way names appear on the ledger in each of these cases? Ex: “Pure DRS”, plan holdings only, mix of both, shares held in subclass, beneficial ownership outside of DTC, etc.

7. Currently, the common understanding is that Dingo & Co is a nominee used by Computershare for investors in DirectStock to enable features such as fractional shares and fungible bulk holdings. Individual investors names are listed as a subclass, which are on the issuer ledger under the name Dingo & Co. This is a form of beneficial ownership, but is not street name ownership, as shares purchased or through plan are removed from the DTC. Is this an accurate description of ownership structure?

8. Does Computershare or its subsidiaries have more than one nominee which holds shares?

9. In June 2023, the SEC’s OIEA and FINRA released bulletins (excerpts below) certifying that investors who purchased through plan and wished to hold shares directly on the issuer ledger needed to transfer those shares from plan to DRS. The CS FAQ uses similar language. Both Plan and DRS investors appear named on the issuer ledger. Could you describe the process of the Plan -> DRS transfer described here, and how the ownership record changes as a result?

10. “According to FINRA, the SEC, and Computershare: Purchases made through the issuer (or its transfer agent) of securities you intend to hold in direct registration are usually executed under the guidelines of the issuer’s stock purchase plan. You’ll need to instruct the transfer agent to move the securities to the DRS.” https://finra.org/investors/insights/know-the-facts-direct-registered-shares “Purchases made through the issuer (or its transfer agent) of securities you intend to hold in DRS are usually executed under the guidelines of an issuer’s stock purchase plan, which uses a broker-dealer to execute the orders. Thus, to hold in DRS once the securities are acquired, you would need to instruct the transfer agent to move the securities from the issuer plan to DRS.”

https://sec.gov/about/reports-publications/investor-publications/holding-your-securities-get-the-facts “Purchases made through the issuer (or its transfer agent) of securities you intend to hold in direct registration are usually executed under the guidelines of the issuer’s stock purchase plan. You’ll need to instruct the transfer agent to move the securities to the DRS.” https://computershare.com/us/becoming-a-registered-shareholder-in-us-listed-companies

10. With DirectStock enabled, a user enters a principal-agency relationship with Computershare. Can you explain the principal-agency relationship Computershare has with an account holder? https://cda.computershare.com/Content/7bfc0b25-4836-40a4-918c-9a86d658d798

11. When Shares are transferred from a brokerage to a Computershare account, only whole shares can be transferred and documents from computershare say “DTC Stock Withdrawals (DRS)”. Are shares purchased through DRP/DSPP also “DTC Stock Withdrawals (DRS)”, but withdrawn to Computershare’s nominee rather than the investor?

12. If the reported DRS totals for an issuer for the last 5 quarters straight are consistent (within rounding of ~100k shares), what are some possible explanations for why this might be?

13. Is it possible any quantity of registered shares are not being counted in the total reported to the company for any reason? (plan designated, DRS shares, fractionals, "operational efficiency", etc) Per CS FAQ, issuers are provided Plan and Book holdings tallies separately.

14. If an investor has a Computershare Investor Center account that's holding shares of designation "Book", does enrolling that account in the DirectStock Plan have any effect on who holds title to those shares? Specifically, do they remain DRS (DRS Form/Pure DRS), or do those shares become held in the Plan? Does it matter the method by which the account is enrolled (such as: plan purchase, DRIP activation, or setting a limit sell order)?

15. If an investor is enrolled in the DirectStock plan, are all the shares (DRS and plan) in their account considered plan-enrolled shares per the Computershare FAQ?

16. Some of Computershare’s online customer service representatives have stated that Dingo & Co was nominee for plan shares for multiple companies, but Dingo & Co has only been found listed in a small number of filings such as proxy for MGE Energy or bankruptcy filings for SOUTHERN FOODS GROUP, LLC. How do investors find more information on Dingo & Co and their function?

Operational Efficiency (OE)

17. Is Computershare (or their subsidiary, nominee, or chosen broker dealer) compensated by the DTC, the Issuer, or any other third party for maintaining operational efficiency?

18. In the May 2, 2023 update video you appeared in, you said “typically we would hold somewhere between 10 and 20 percent of the shares that underpin the plan through our broker at DTC” and that “we need to maintain a small portion of the inventory at DTC so that we can have effective settlement.” Can you define ‘underpin’ and ‘the plan’? Is the "whole" all shares of a given security owned by accounts enrolled in the DirectStock plan?

19. How could an investor of a given security learn the exact number of shares kept with DTC for OE% by Computershare on a given date?

20. Are shares of any given security owned by accounts enrolled in the DirectStock plan maintained in fungible bulk and held by Computershare’s nominee?

21. Near the end of the 5/2/23 YouTube video “An update on Fractional and Plan Shares”, you said there was a "mischaracterization" of the problem online. What did you mean?

22. Computershare states on the FAQ that they determine the portion used for OE - how is that ratio determined, and how often is it recalculated? Is it a function of a market condition such as volume, price, or something else? Is there a way for investors to track how many shares are allotted for OE?

23. Are the claims made on Shareholder Service Solutions about DirectStock on this page correct, specifically regarding the cost to issuers who are interested in DirectStock? https://shareholderservicesolutions.com/news-item/online-only-direct-stock-purchase-plans-from-computershare/

24. You have stated in the past that DTCC typically holds 10%-20% of plan shares for operational efficiency. What about in atypical situations - How often and how far does OE% stray from the 10-20% range? Has any individual equity risen above that mentioned threshold, and what’s the highest percentage that an equity has ever experienced?

25. Does operational efficiency negatively impact the continuous holder requirement, as required for items like shareholder appraisal rights?

26. Are DRS designated shares pulled into the plan when DRP/DSPP (DirectStock) is enabled, or are only Plan designated shares affected by enrollment?

Reporting

27. Does Computershare directly provide issuers with a total account of issued shares, broken down by record holder, totaling up to shares outstanding? Is this data available to the issuer in real time through the Issuer Online portal?

28. Under what circumstances (if any) would DRS shares held with Computershare for which Cede & Co is not the registered holder be held at the DTC?

29. Under what circumstances (if any) would Plan shares held with Computershare for which Cede & Co is not the registered holder be held at the DTC?

30. Can you confirm if there are currently any ongoing corrections or dispute resolutions involving Direct Registration transactions, specifically using the '396 (Direct Registration Reclaim DK-Without Memo Seg)' code, that have impacted reportable DRS numbers in any stock significantly?

31. Could you provide details on how the application of the '396' transaction code for Direct Registration Reclaim DK-Without Memo Seg activities is being monitored to ensure the integrity of DRS numbers?

32. What procedures are in place to review and approve transactions under the '396 (Direct Registration Reclaim DK-Without Memo Seg)' code, and how are these documented in the context of DRS reporting?

33. Has computershare seen any significant volume increase in Delivery Orders marked with codes 391 or 396 around significant DRS reporting dates for any of its issuers?

34. Could you speculate as to why an issuer might choose to adjust the language in their 10Q/K of the way they report DRS totals, or what a change in language could imply? For example, if an issuer reported DRS shares as “directly registered” for almost two years and then changed the language to “registered” alone.

FRACTIONAL SHARES

35. Is it possible to be the sole legal title holder of a fractional share, meaning no other entities other than the investor are involved in the ownership of that fractional share?

36. Are fractional shares entitled to cast votes? Is this issuer dependent?

OTHER

37. Why does the issuer name come up on bank statements when purchasing through DirectStock?

38. Multiple French companies provide various benefits to “pure registered” shareholders, for example L’Oreal awarding an increased dividend payment. Does Computershare offer U.S. issuers the option to provide benefits like this? Does Computershare offer these benefits in other countries?

39. Computershare has indicated in the FAQ that it is up to individual issuers to disclose shares in DSPP in their tally of directly registered shares, and that such a disclosure may be subject to legislation and regulation. Could you direct us to the relevant legislation and regulation?

40. Between Feb 24 and March 20 of 2023 there was a change made to CS FAQ involving the maximum limit sell order amount reduction in 2022, citing the risk cap of the broker. The limit was changed again around Feb 22 of 2023 to 7x the price of the security. Why was this language removed from the FAQ? It would seem plausible to remove that if 7x the current security price is within the brokers tolerance, but it also had specifically mentioned that this change was made because of 2 specific securities who had >7x their price in 2021 from 2020.

41. Does Computershare have any input as to the language used in financial disclosures for DRS ownership (GME / AMC) or do they provide the holdings data alone?

42. Computershare organizes recurring purchases for hundreds of stocks through various Plans, and specifically with DirectStock Computershare operates a predictable recurring market buy. Does Computershare profit (through PFOF or otherwise) through the provision of this market data and activity to its broker partners?

43. Do you feel that a recurring and predictable schedule for recurring buys creates an issue for recurring buyers? Predictable price movement can lead to arbitrage opportunities and can result in worse outcomes for plan participants in terms of dollars invested/shares owned.

44. Who, besides DTCC, can see ownership records of DTC members at the DTCC?

45. When participants log into the FAST system at the DTCC for DRS functionality, can they see anything about shares that the DTCC holds? The user manual for the FAST system has a DRS section but it is only a couple of pages with some screenshots, not granular data.

46. What are the effects of a “Chill” on DRS transactions?

47. What is Computershare’s regulatory requirement in reporting possible crime if you notice problems or discrepancies?

48. What are the effects of a Stop Trade designation on an account that holds either only Plan, only DRS, or both Plan and DRS shares?

49. Several investors with multiple Computershare logins have reported that placing a stop trade restriction on a single account is blocking their ability to login to all accounts. Should this be happening and if not, how can they get this resolved?

50. Certificated shares may be enrolled into "DirectStock plan", but they are labeled "not available". Can you clarify what "not available" means in that regard?

51. Is there a cost to an issuer for offering Computershare's QuickCert paper certificate service to their investors, by which Investors can pay $25 each to certificate their shares?

52. When a Transfer Agent and the DTCC disagree on the cause of a share discrepancy what is the share reconciliation process? How long do these instances take to resolve, and what is the largest instance of this happening to your knowledge?

Thank you for taking the time to answer these questions. As the largest transfer agent for U.S. markets, we hope to continue this journey of transparency and understanding with you.

Sincerely,

The WhyDRS Team and Various Investor Communities

APPENDIX - Terms Book Entry - All electronically tracked and uncertificated shares are considered book-entry shares. Book Holdings - Shares labeled ‘Book’ on the Computershare Investor Center UI Plan Holdings - Shares labeled ‘Plan’ on the Computershare Investor Center UI Pure DRS - An investor center account with 0 Plan holdings and is not enrolled in DirectStock DirectStock - Proprietary Computershare plan structure. Not sponsored or administered by the issuer. Investors will be listed on the share ledger in a subclass under Computershare’s nominee - this is technically a type of beneficial ownership. Plan - A Plan allows investors to facilitate purchase of shares through the Transfer Agent’s interface. This can involve market purchases or can involve sale directly from the issuer. DSP (Direct Stock Plan) - from what we can find, this is clearly defined by the SECand involves direct purchase from the issuer and special issuance of shares. DSPP (Direct Stock Purchase Plan) - Not clearly defined by the SEC, but DirectStock is described as one and involves recurrent purchase at the market through Computershare broker partner. Chain of Custody - A reflection of ownership rights through different market participants, tracing from legal holder to the ultimate beneficial owner at the other. EX: Investor>Broker>Cede and Co On the Ledger / Registered holder - Registered holders, per CS FAQ, are listed by name on the company register. This would include both ‘Pure DRS’ investors along with ‘Plan’ investors. Legal Title Ownership - An investor has legal claim to the underlying asset, and may share that claim with other entities. Sole Legal Title Ownership - An investor is the only entity with legal claim. Operational Efficiency - The process of keeping a portion of the fungible bulk of plan shares with a broker partner (with DTC) in order to facilitate quicker and more efficient settlement. Underpin - We’d like a better definition for this. You used this word to describe the shares which are involved with the DirectStock Plan. Nominee - Entity in which securities are kept in order to facilitate transactions more smoothly. Custodian - When a firm is holding an investment on behalf of a client for safekeeping Omnibus - The pooling of investments from multiple individuals under an entity such as a nominee. Fungible Bulk - A description of shares kept in an omnibus. Fungible bulk shares are indistinguishable from each other and can be drawn down against the total without impacting the listed holdings of any participant. Dingo & Co - Listed as Computershare’s nominee on an MGE Energy Proxy Filing. Does it also act as Computershare’s nominee for other plan structures? Computershare Trust Co NA - A DTC Member and broker subsidiary of Computershare. Manages the sales facility, and when a limit sell order is placed, shares will be transferred to Plan designation under this section of Computershare. Chill/Freeze : A method of preventing transactions from occurring on specific shares or a CUSIP involved in a corporate action. When shares are chilled, they cannot be moved. This list of terms is not exhaustive, and so if you can think of any terms which are commonly misunderstood or confused, we'd appreciate your adding them.

First: Reddit's S-1 Filing landed today.

TechCrunch Article: https://techcrunch.com/2024/02/22/reddit-files-to-go-public-at-last/ Filing Link: https://www.sec.gov/Archives/edgar/data/1713445/000162828024006294/reddits-1q423.htm

Second: Reddit send out DMs to a subset of users announcing their filing and inviting them to participate in a DSP. Here are some screenshots of that message:

Third: Reportedly, Google has tapped into Reddit as a data hub for person to person interaction.

https://www.thedailybeast.com/google-will-pay-reddit-dollar60m-a-year-to-use-its-content-for-ai-report?via=twitter_page

There has also been some interesting reporting of hidden 'community score' metrics which are attached to user accounts being discussed. Here's one comment linking to several discussions.

https://www.reddit.com/r/modnews/comments/16is6dh/contributor_quality_score_available_to_all/k0neipn/

This week on Taking Stock, Chives sits down for a full one on one interview with John Wooten. John is a published author, has a series of financial education videos online, and founded BlockTransfer. BlockTransfer is an SEC approved Transfer Agent using a public blockchain called Stellar to track issuer ledgers and investor ownership.

Chives and John talk broadly about the various major issues which plague the modern capital markets, how a perverse incentive system separates working people from their wealth, and the archaic financial tradition which hasn't undergone major rethinking in thousands of years.

This conversation is a whirlwind and you won't want to miss it.

#Taking Stock #16

Twitter Link:

https://twitter.com/i/spaces/1OdJrjdqmjvJX?s=20

mp3 Link:

https://static.wixstatic.com/mp3/06e09f_e983557461d048c7acfcf6db3102cece.mp3

#Important Reminders

• Listen to Taking Stock on demand (https://linktr.ee/takingstockpodcast)

• Join DRSGME Discord (https://discord.gg/EGvmpdGDm)

• Join Lemmy (https://lemmy.whynotdrs.org/)

• Visit https://www.drsgme.org and https://www.whydrs.org

• Terminate DirectStock (https://www.drsgme.org/terminating-from-directstock)

#Links and Resources:

• BlockTransfer Website and Blog https://www.blocktransfer.com/blog/
• John Wooten's Author Page on Amazon https://www.amazon.com/stores/John-F.-Wooten-IV/author/B07N7HS5TS?ref=ap_rdr&store_ref=ap_rdr&isDramIntegrated=true&shoppingPortalEnabled=true
• BlockTransfer Patent, using Blockchain to Innovate Transfer Agent tradition https://patents.google.com/patent/US20220284507A1
• BlockTransfer InVenture Prize Presentation https://www.youtube.com/watch?v=S75IvkicWD8
• BlockTransfer Stellar Community Fund Pitch https://www.youtube.com/watch?v=1Lq51IJDHI0

https://www.drsgme.org/terminating-from-directstock

This picture guide breaks it down into simple steps for investors who are seeking total legal ownership of their assets.

Hey all. Writing this a few days after the 12/6/23 Q3 10Q release from GameStop, which showed the third consecutive stagnate reporting for DRS ownership (after controlling for Mainstar un-DRSing 1.2million shares during Q2).

Why are the DRS numbers stagnant?

From my perspective, there are 3 possible explanations / hypotheses.

1. The DTCC is somehow "making GameStop report these numbers". This is currently a popular take on social media. Ryan Kagy called it confirmed on Twitter. Top posts on Superstonk claiming something was off from users like dreadfulol and welp007, to give some examples. A common sentiment in the threads linked is that the DTCC or SEC are forcing the report language or findings somehow.

2. The report is accurate, and DRS numbers are actually stagnant.

3. The report is accurate, and DRS numbers drawn for the report are being manipulated.

For the purpose of this DD I need to be clear that I don't believe #1 is possible. GameStop controls the issuer ledger, Computershare manages it for them. I believe they are reporting accurate information, and the numbers reflect what they have access to on the record date.

2 is possible, wouldn't be able to prove or disprove, but the community is still strong. Anecdotally, I increased my DRS position 9% this quarter.

3 is what I believe to be the case. I will explain how this could be done, and provide cited primary sources. These sources are why it is my preferred explanation over the speculation required for #1 and #2. I'll section some source information below, and build to the hypothesis for what could be happening.

GME's Quarterly Reports are Accurate

The DRS numbers provided in any of the GME financial reports are provided using a specific record date. Here's a graph showing every DRS record date and report filing date since DRS reporting began. You can also check these dates for yourself using GME's SEC Filings directory

We'll be starting from this assumption, providing and developing some surrounding facts, and then positing an idea to explain accurate DRS reporting and the stagnant numbers at the same time.

TLDR: DirectStock enrolled accounts contribute to a fungible bulk of shares held by Computershare's nominee. Although these investors are named on the share ledger, they are still beneficial owners. Computershare keeps a portion of the shares which underpin the plan (stated to typically be 10-20%) with the DTC. I believe it is possible that the portion of DirectStock shares which are held with DTC on record dates are not included as DRS shares for the purpose of the DRS reporting on GameStop's10-Qs throughout 2023.

Whether or not the DTC can use the operational efficiency plan shares for locates is not relevant to this idea. I am only mentioning it because often locates are brought up as part of the DirectStock revelations first posited as part of the heat lamp theory, even though locates have nothing to do with this concept.

Plan is not DRS.

The SEC states the following on an article about the types of ownership available to investors.

"Purchases made through the issuer (or its transfer agent) of securities you intend to hold in DRS are usually executed under the guidelines of an issuer’s stock purchase plan, which uses a broker-dealer to execute the orders. Thus, to hold in DRS once the securities are acquired, you would need to instruct the transfer agent to move the securities from the issuer plan to DRS." - SEC Bulletin 7/12/23

Similarly, FINRA states the following on an article about the types of ownership available to investors.

"Purchases made through the issuer (or its transfer agent) of securities you intend to hold in direct registration are usually executed under the guidelines of the issuer’s stock purchase plan. You’ll need to instruct the transfer agent to move the securities to the DRS." - FINRA Investor Insight 7/12/23

Both of these pages were published on the same day.

There has been a false equivalency created in the discourse allowed in some GameStop communities. For example, on Superstonk, moderators often state that "there is no wrong way to hold" and use that as a wedge to limit discussion of ownership details for plan designated shares and DirectStock enrolled investors.

If you are an investor seeking total ownership of your assets, holding in DRS is the only way. Holding shares with the issuer's transfer agent in an investment plan is better than holding with a broker in terms of named ownership - but DRS holdings are even better. Shares held with a Plan are not DRS, and must be transferred out of the plan and into DRS.

I want to mention here that there is nothing wrong with purchasing through DirectStock if that is what makes sense for you. Many international investors buy GameStop through the plan because DirectStock is much more affordable than buying through a broker and paying them to do a DRS transfer. The fee for DirectStock is $5 and some international brokers cost hundreds of dollars to DRS, so it's smart to use DirectStock in these cases. You can check your broker's rates at DRSGME.org.

If you choose to buy through the DirectStock plan, and want to ensure total ownership of your assets, manually terminate the plan after each purchase. This will leave your account with pure DRS holdings.

Here's our DRSGME guide on terminating DirectStock: https://www.drsgme.org/terminating-from-directstock

What is GameStop's Investment Plan?

GameStop contracts Computershare as a Transfer Agent to manage it's stock ledger and distribute shareholder materials such as proxy materials for the annual general meeting.

Computershare offers several proprietary plan structure to interested companies. They have a custom option called CIP (Computershare Investment Plan), they manage DSPs (Direct Stock Purchase) for other companies such as Home Depot in which the issuer can sell stock directly to investors, but the most common plan offering that they have is called DirectStock, and which is billed as a Direct Stock Purchase Plan. The boiler plate DirectStock brochure is located here.

GameStop uses the DirectStock plan.

How is Ownership recorded for Plan shares?

I'll be using Paul Conn's public appearances for this section. Paul Conn is President of Computershare Global Capital Markets, and was kind enough to appear multiple times speaking with the broader investor community as they learned more about ownership and direct registration. A full list of his appearances can be found in my post here

Through the selections below, you will see clearly that Computershare has provided the information that Plan is not DRS multiple times over the years and that Paul Conn (representing Computershare) is in agreement with the SEC on this key point. Plan is not DRS. Let's go through the quotes, and I'll follow up on the other side. I've left them whole and bolded sections which are most important.

GMEJungle AMA with Paul Conn, timestamp for following section is 6:10.

Question: As you discussed in previous interviews. the direct stock purchase plan describes shares that I buy through Computershare that you keep in a separate sort of custodial type account which is different from book shares do I have that right?

Answer: Different from shares held in the DRS form that's absolutely correct. So shares that are held in DRS are recorded as common shares on the register of the company, so that they're held in in pure legal form in the investor's name. Shares that are purchased through the plan are held in a sub-class so they are reported to the issuer just as if they were common shares but the underlying shares are held in a nominee owned by computershare. Those shares however can be moved between the plan and DRS anytime electronically free of charge. The only reason we do this is purely for efficiency. When we're buying shares, we need to deliver securities into the marketplace so having them available in a nominee helps, so that's the way it's structured.

Question: There's confusion about beneficial (ownership) - does that qualify as what they they consider beneficial versus registered shares? So you're saying that the direct stock purchase plan would be considered a beneficial ownership situation?

Answer: You're recorded directly on the register of the issuer. The issuer knows exactly who you are so you have that benefit. **Technically the common shares are held by a computer share entity. ** We don't hold 100 of the shares that way, we just hold a number of shares so that we can perform effective clearing and settlement but at any time investors can can move their shares between the plan and pure DRS.

An Update on Direct Share Registration, timestamp for following section is 8:09.

Question: As you mentioned there's been a lot of discussion by social media in particular around the differences between direct shareholdings and direct stock purchase plans. Now I know we've updated our FAQs to provide more details on those differences but could you just talk us through the similarities and distinctions?

Answer: Sure. I mean, this is one where I thought we had put sufficient information in the marketplace, but it's clear over the last two or three weeks over the holiday period that it clearly is some some miscommunication still going on. I don't know whether that's misinformation or what so we would try and be very very clear in terms of how the dspp and the drs structures work. To be perfectly clear people should go to the FAQ. I'm going to try to give you a summary of it here but but in essence - If you have a holding of dspp (shares that have been purchased through the direct stock purchase program) they are held in your name on the register just the same way as what I've called pure drs. There really is no practical difference to the way the shares are recorded or how they're visible to the issuer so hopefully that clarifies one key component. For both types you receive your investor communications directly from the company through us as their agent, so again I hope that clarifies. In terms of the direct stock purchase plan you are able to hold fractions - you are not able to hold fractions in what I've called pure drs so that is a key practical difference in terms of this structure. The reason there is a difference between these is because in the direct stock purchase plan we use a nominee company that computer share owns and controls to hold the common shares on behalf of all of the investors in the plan. That doesn't mean the shares are held in DTC and I think that's where some investors are automatically jumping to the conclusion that because they are beneficially held that they must be in DTC, and that that's not the case. So in this situation you know it's really important for people to make their own minds up as to which account they want to leave their shares in. **They can freely transfer their shares electronically from the plan to the DRS environment. ** We've said that before, there's no charge for doing that, I think what we've noticed is people are saying you ought to / you must transfer your shares from the plan into pure DRS and I'm not quite sure why people have chosen to do that. It's their choice after all but what we've seen and read is that where people are transferring whole shares from the plan to pure DRS they're also at the same time selling their fraction. I'm not quite sure why they're doing that and it's not our job to question why they are or why they aren't but people should you know feel free to leave their securities in the plan if that's what they want to do and please use the faq that's the primary way in which we'll communicate these very technical differences but I hope I can give you a flavor through this communication what some of the subtle differences are - but by and large they're the same form of holding the same underlying share.

Question: Are there any differences in the way that DRS and DSP shares are reported?

Answer: Not to the company no. I mean they're all... Paul Conn holds shares in pure drs form and hold shares in the plan, the company will be able to see both of those holdings so no no none whatsoever. And, that's probably the key difference where people might be getting confused about. If some underlying shares supporting the plan are held in drs form then they must be in dtc and therefore they can't be visible to the company. I think that's maybe where the misunderstanding has arisen from, but that's not the case.

An update on Fractional and Plan Shares from Computershare’s Paul Conn, timestamp for following section is 0:22.

Question: So we've seen a recent increase in online discussion around fractional shares and around plan shares. What do you think is driving that increase?

Answer: You know, I'm not completely sure. I have been keeping track of some of the narrative but I think at the core of it there is a concern among some investors that if any Shares are held in DTC that that must be a bad thing. I'm not sure we subscribe to that point of view and I'm happy to talk about how the plan is constructed so that we can you know create some uh Clarity some transparency and remove some of the confusion so let's just go through it.

Question: Can you recap how it works, can we talk about what percentage is generally held both in and outside of DTC?

Answer: So I think today we have always said that we maintain a portion of the underlying shares within DTC, that's actually true, it was then it is today. Typically we would hold somewhere between 10 and 20 percent of the shares that underpin the plan through our broker at DTC. We've previously confirmed with our broker and notified people through the FAQ that those shares are not available to be loaned. The balance of the shares, the 80 to 90 percent, sit on the register also through a computer share subsidiary and those two pots (the 10 plus the 90 or the 20 plus the 80) underpin all of the shares that we record in the individual investors names within the plan. So that's how the reconciliation works. We need to maintain a small portion of the inventory at DTC so that we can have effective settlement when people are selling but hopefully that clarity will remove some of the confusion about, you know, what portion actually is within the system and the system being the DTC system and if they're in the DTC system does that mean they're automatically being lent.

Computershare's FAQ for Investing in US Listed Companies

"Computershare holds a portion of the aggregate DSPP book-entry shares via its broker in DTC for operational efficiency, i.e. to enable any sales to be settled efficiently (and Computershare determines the portion needed for operational efficiency reasons. Such shares are not available for lending. These shares are eligible to be withdrawn from DTC)."

Susanne Trimbath's Interpretation

"Proof that the directly registered shares are not available to DTC or any broker FOR ANY PURPOSE is in the fact that, for example, @Computershare has to put some shares in a DTC account to settle any trades they do to maintain the plan."

Okay - what can we learn from all of this?

There is a clear difference in Plan and DRS ownership, as stated by the SEC and Computershare.

It is true that both of these are recorded directly on the issuer ledger and the investor names are provided to the issuer as two distinct lists. The key difference for plan enrolled shares is that the investor is listed by name in a subclass, and the shares are owned by a Computershare entity - their nominee. Investors are beneficial owners in this case.

Those shares contribute to the fungible bulk which Computershare maintains access to in order to facilitate market transactions. They will typically keep 10-20% of this fungible bulk with DTC in order to effect more efficient settlement for their clients who choose to sell. The Computershare FAQ specifies that Computershare decides this percentage.

Computershare has a subsidiary broker which is also a DTC Member Broker called Computershare Trust Co NA.

DTC Member List - see 'participants'.

Computershare Trust Co NA maintains the DRS Sales Facility

DirectStock enrollment is what determines whether or not your shares are accessible through Computershare's nominee to be moved to DTC for operational efficiency purposes. If you hold total legal ownership of your shares by holding directly on the issuer ledger through Computershare while also avoiding account enrollment with DirectStock, you know that your shares will not ever be part of the shares kept with DTC for operational efficiency.

What Enrolls an Investor in DirectStock?

When making a direct purchase, you will automatically be enrolled in DirectStock and shares will appear as "plan" on the investor center in Computershare. This is treaded ground, and many investors have decided to transfer their plan designated holdings to book designated holdings within the Computershare platform.

But - did you know that even if you have 0 plan shares in your account, you may still be enrolled in "the plan", DirectStock?

If you have fractional shares, you are enrolled. If you have plan shares, you are enrolled. If you have DRIP enabled, you are enrolled. If you have a limit sell set, you are enrolled.

Here's a handy graphic which can help to tell at a glance if you are enrolled.

If at any time you are unenrolled and then make a new purchase (adding plan shares to your account), turn on DRIP, or set a new limit sell - you will be automatically enrolled in DirectStock.

Plan shares are not DRS. If you seek total ownership, use the Terminating from DirectStock guide to move all shares to DRS.

Note: If you terminate, any fractional shares will be sold. Typically sales come with a $25 fee, but if your fractional is worth less than $25, Computershare will process the sale and you will not be charged the difference.

Why is DirectStock enrollment so important?

Plan is distinct from DRS.

Computershare has a public history asserting that investors in plan are beneficial owners, and the purpose of the distinction is to allow for more liquid markets and efficient settlement.

DirectStock enrollment can be unintuitive, with some investors enrolling by accident or assuming they have terminated when they have not.

Now, it's time to wrap back around to the beginning.

The DRS reporting dates chosen for the financial filings sometimes have much higher volume than the surrounding dates. Heat Lamp was positing that higher volume would lead to a larger % of shares kept with DTC for OE, since that higher volume likely translated to requiring more shares on hand for settlement. Graph made by LawsonDT of DRS record dates and volume

While this does not hold true for every report in 2023, Mainstar's 1.2mil share clawback to Cede took place in the Q2 reporting cycle.

If the record dates are known to DTC ahead of time, participants could orchestrate higher volume, which will allow more access DirectStock shares for operational efficiency, and then when the snapshot for DRS they have custody of shares kept with them. This could allow a control of reporting results to 76mil.

It's a different question why controlling to 76mil would be important. Curiously, this was the original float size at time of the Jan 2021 sneeze.

https://news.gamestop.com/news-releases/news-release-details/gamestop-discloses-third-quarter-2023-results

EPS: -0.01

DRS Numbers:

As of November 30, 2023, there were approximately 305,514,315 shares of our Class A common stock outstanding. Of those outstanding shares, approximately 230.1 million were held by Cede & Co on behalf of the Depository Trust & Clearing Corporation (or approximately 75% of our outstanding shares) and approximately 75.4 million shares of our Class A common stock were held by registered holders with our transfer agent (or approximately 25% of our outstanding shares) as of November 30, 2023.

--

Steady DRS numbers. Beat expectations on EPS, trending towards positive. Great results!

What do you all think?

This week on Taking Stock, Chives and Bibic wrap up this historical miniseries by examining how the vision of the DTC came to fruition and how it impacted the markets at large and how it impacted every day working people. Beneficial ownership has been forced onto everyday investors. The SEC says it's a choice, but when was the last time DRS was offered to you when investing in a company?

Dematerialization and the transition to book-entry (otherwise known as an electronic record) are discussed, alongside the introduction of a new character in the story - The Direct Registration System.

#Taking Stock #15

Twitter Link:

https://x.com/i/spaces/1MnxnMAAvzMJO

mp3 Link:

https://static.wixstatic.com/mp3/06e09f_003f892f9dde4fba969e3e0dbb0596a4.mp3

#Important Reminders

• Listen to Taking Stock on demand (https://linktr.ee/takingstockpodcast)

• Join DRSGME Discord (https://discord.gg/EGvmpdGDm)

• Join Lemmy (https://lemmy.whynotdrs.org/)

• Visit https://www.drsgme.org and https://www.whydrs.org

• Terminate DirectStock (https://www.drsgme.org/terminating-from-directstock)

#Links and Resources:

• History of DRS / Book Entry Holding https://www.whydrs.org/post/history-of-drs-book-entry-holding
• Issuers and the DTCC is Choice without a Choice https://www.whydrs.org/post/issuers-and-the-dtcc-choice-without-choice
• Paper Securities and Dematerialization https://www.forbes.com/sites/tomgroenfeldt/2020/10/15/paper-securities-still-exist-and-dtcc-is-after-them/?sh=5b5fb5cc35e9
• Suzanne Trimbath's "Super Hero Origin Story of Direct Registration" https://nosafebets.com/2021/10/03/super-hero-origin-story-of-the-direct-registration-system-a-transcription/

This week on Taking Stock, Chives and Bibic continue looking back in time, but this week it's to The Great Paperwork Crisis of 1968, which led to the rationalization and birth of The Depository Trust (AKA The DTC). We look at why it made sense for the time, but how it is severely outdated today, and the impact that has on markets.

We also had a surprise special guest join us! John Wooten, founder of BlockTransfer, the first blockchain based transfer agent. We spoke to John about the ins and outs of how a blockchain based transfer agent works as well as a current SEC proposal that will enable API access to Edgar filings. This kind of access will allow developers to create apps to not only help with searching through the Edgar system, but to help make the filings as well.

We'll be having John back on in a future week on December 13th - mark your calendars! If you have any questions you'd like him to be asked, please leave them below.

#Taking Stock #14

Twitter Link:

https://x.com/i/spaces/1YqxoDqLprbKv

mp3 Link:

https://static.wixstatic.com/mp3/06e09f_64b8a51b6fb44d9b93fc72845718b4f1.mp3

#Important Reminders

• Listen to Taking Stock on demand (https://linktr.ee/takingstockpodcast)

• Join DRSGME Discord (https://discord.gg/EGvmpdGDm)

• Join Lemmy (https://lemmy.whynotdrs.org/)

• Visit https://www.drsgme.org and https://www.whydrs.org

• Terminate DirectStock (https://www.drsgme.org/terminating-from-directstock)

#Links and Resources:

• The Birth and Rationalization of Cede https://www.whydrs.org/post/cede-ing-ownership-why-almost-all-publicly-traded-stock-belongs-to-one-company
• Articles on the Paperwork Crisis of 1968 https://therepubliccapital.com/blog/the-great-paperwork-crises-of-1968 https://www.bbh.com/us/en/bbh-who-we-are/our-story/200-years-of-partnership/the-paperwork-crisis.html
• BlockTransfer - Web3 Transfer Agent https://www.blocktransfer.com/
• SEC Proposal - Edgar Next https://www.sec.gov/rules/2023/09/edgar-next
• DTC/Cede holds 83% of all securities - 1998 https://www.sechistorical.org/collection/papers/1990/1998_0101_DTCAR_1.pdf

GME is getting a lot more attention over the last couple of days than it has been due to the first major price action and high volume days in months.

Ryan Cohen has said and shown that long term company profitability is his major goal - and not just incidental quarterly profit, like we last saw from Q3 2022.

Under Cohen's leadership, GameStop has closed underperforming stores and opened new distribution warehouses along with revamped the company infrastructure for organizing orders and which employee benefits are provided. We have seen the gradual impact since he took over in a difficult time for a brick and mortar store - and teetered on profitability last quarter.

2023-07-31 $-0.01
2023-04-30 $-0.17
2023-01-31 $0.16
2022-10-31 $-0.31
2022-07-31 $-0.36
2022-04-30 $-0.52
2022-01-31 $-0.50
2021-10-31 $-0.35
2021-07-31 $-0.21
2021-04-30 $-0.25
2021-01-31 $0.31

I expect us to beat last years $-0.31 in tremendous fashion, but I don't know that we'll see positive EPS just yet. How about $-0.09 ... reasonable and grounded? Still a great improvement moving forward, and less than the previous two quarter year-over-year jumps.

Meanwhile, leading into an anticipated earnings, we are seeing massive and sudden price action and volatility out of seemingly nowhere. Although I personally prefer the ongoing stability / downtrend to keep accumulating shares in a company that has a strong cash position, close to no debt, and which is positioned in an industry strong in poor economic times. Though the market sometimes disagrees, most families feel these conditions are difficult and are tightening their belts.

Either way, I enjoy adding a few shares every week. This week is no different.

How is everyone feeling?

Hey all! Wanted to bring attention to a SEC Comment period which is ongoing at the moment (but closes tomorrow), which John Wooten covered on last weeks Taking Stock.

TLDR - The SEC is considering opening up EDGAR's API. EDGAR is the file submission and storage system which all US companies must use to submit reports such as 10-Q/10-K, 13D, and hundreds more. These submissions can be arduous or complicated process and companies often choose to outsource to expensive specialty firms or to their transfer agents.

If the API is opened up, issuers everywhere would be able to use or develop more modern tools to submit electronic data in a cheaper and more sustainable way.

I believe that John Wooten, who is founder of BlockTransfer (an SEC approved Transfer Agent which maintains client ledgers on the Stellar blockchain) is trying to help level the playing field of complexity so that his business can get a better foothold. I'm all for blockchain transfer agents and I'm all for open API, so I'm interested to support this proposal.

BlockTransfer will be submitting a comment letter tomorrow, which I have here to share. Please check out the proposal information as well. If you have any comments you want added on anonymously OR if you want to submit a comment yourself OR if you want to submit the BlockTransfer comment letter PDF as show of support, here are the ways to do so.

Read more about the proposal: https://www.sec.gov/rules/2023/09/edgar-next https://www.sec.gov/files/rules/proposed/2023/33-11232.pdf

Submit a comment: https://www.sec.gov/comments/s7-15-23/edgar-next#no-back

Currently Received Comments: https://www.sec.gov/comments/s7-15-23/s71523.htm

BlockTransfer's Comment Letter: https://blocktransfer.com/EDGAR-next.pdf

https://www.sec.gov/rules/2023/09/edgar-next

Thanks to John Wooten of BlockTransfer I've just learned about this current SEC proposal on the docket, which is open for comment for one more week.

TLDR: Issuers are required to submit information to the SEC consistently and for a variety of reasons. This data is submitted through EDGAR - and it can be an arduous or complicated process on which issuers must spend time and resources, and often choose to outsource.

The SEC is considering introducing an API for the EDGAR submission system, which could revolutionize accessibility and could introduce much needed innovation and efficiency to a difficult and convoluted process.

I still need to read more on the subject, but wanted to share here ASAP for those interested. Check it out, and consider leaving a comment if you feel EDGAR API access could be helpful for issuers! I will be leaving comments here over the next day or two as I take a closer look and better understand the proposal.

This week on Taking Stock, Chives and Bibic take a trip back in time to the panic of 1907. A panic caused by wealthy people over leveraging themselves, leading to the public trying to take their money back from their respective banks. The same wealthy people that caused the panic decided they needed to protect themselves from future potential bank runs, this led to the creation of the Federal Reserve.

Taking Stock #13

Twitter Link:

https://twitter.com/i/spaces/1djGXNjgddexZ

mp3 Link:

https://static.wixstatic.com/mp3/06e09f_89158b1fc98448fc8d0fd64720b6803b.mp3

#Important Reminders

• Listen to Taking Stock on demand (https://linktr.ee/takingstockpodcast)

• Join DRSGME Discord (https://discord.gg/EGvmpdGDm)

• Join Lemmy (https://lemmy.whynotdrs.org/)

• Visit https://www.drsgme.org and https://www.whydrs.org

• Terminate DirectStock (https://www.drsgme.org/terminating-from-directstock)

#Links and Resources

• The Panic of 1907 and the Birth of The Federal Reserve https://www.whydrs.org/post/the-panic-of-1907-and-the-birth-of-the-federal-reserve

• The Creature from Jekyll Island https://archive.org/details/TheCreatureFromJekyllIslandByG.EdwardGriffin

• Computershared.net is back! https://www.computershared.net/ https://imgur.com/0ZM7C74