Good morning, it's Paul here!

Graham is writing today's main report (Part 1).

This report (Part 2) is a bonus report from me, to catch up on some of the company reports which I missed earlier this week, due to generally getting bogged down, not sleeping very well, and feeling permanently tired (which makes writing difficult).

GAME Digital (LON:GMD)

Share price: 39.0p
No. shares: 172.9m
Market cap: 67.4m

(at the time of writing, I hold a long position in this share)

Changes in major shareholdings

All was revealed yesterday afternoon, with a series of "Holding in company" RNSs. I was correct that Elliott Advisors (Duodi) has sold completely, its 36.5% stake in GMD. However, my theory that Sports Direct might have bought the overhang, and launch a bid, was wrong (wishful thinking perhaps!). Our reader "Gromley" was correct - that the overhang has been placed with various institutions.

There are now some excellent new names on the GMD major shareholder list, in particular I very much like that Gervais Williams' outfit, Miton, has taken a hefty 13.1% of the company at 35p. Canaccord has taken 11.8% for discretionary clients (possibly something to do with Hargreave Hale, I wonder?), and J O Hambro has taken 5.1%. The balance I suppose would probably have been distributed to under 3% holders, hence not requiring disclosure.

All in all, whilst falling short of my hopes for a takeover bid, this is a very pleasing outcome. A huge overhang of GMD shares, which was clearly depressing the share price, has been eliminated in one fell swoop. We also have some respected institutions coming on board at 35p.

I reckon this endorses the bull case - the new strategy of developing "BELONG" format stores, both standalone, and within Sports Direct shops. That the deal was done at 35p, with the share price rising as the deal would have been underway, seems encouraging to me, looking at the recent chart (see below).

I imagine there would probably have been presentations to institutions, who clearly like what they heard. It's always good when placings (for new money, or secondary placings of existing holdings) are done into a rising share price, at no discount.

This deal should improve liquidity in GMD shares, and could trigger follow-on buying from institutions perhaps, if they like the company's future…

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