The MOASS is inevitable!

DD 📊

Listen fellow apes, relax! The Mother Of All Short Squeezes will happen! I’ll show you that even with conservative numbers, we’re in for a hell of a ride! 🚀🚀🚀

If you have the slightest doubt in the MOASS, you seriously need to keep on reading!

(Too ape to read? TLDR at bottom.)

🚀 Short interest in GME

The official number as of 14 March is 10.19M shares of the GME stock sold short (cough BS! cough), but even a really conservative estimate puts the short interest at 38M, and that is a very conservative estimate. (I will argue later that this is actually far too conservative.) This may look like a puny number compared to the more speculative numbers that have been thrown around lately, but you have to understand that even this number is HUGE! This is more than 50% of the shares outstanding! To put this in context, 20% of the float is considered extremely high! According to yahoo finance, the float of GME is about 45.3M, and with 38M sold short, the short interest is 84% of the float! Let me repeat, 20% is extremely high, which means that 84% is beyond extreme! (I see different numbers for the float on different sites, it depends on how you define it, and I’m not sure what the best estimate is, but even if the float was 70M (100% of shares outstanding), a SI of 38M would be extreme!)

🚀 The shorts must be covered

If you look up shareholders for GME on any financial site, you will quickly notice that more than 70M shares (the actual number of shares in existence) is owned by institutions alone, e.g. yahoo finance says 110.64%, or 77.4M shares. But how is that even possible when there’s only 70M shares issued? Wall street Journal put it this way:

Though that seems impossible, a perfectly benign explanation exists. Imagine that Jack borrows 100 shares of GameStop from mutual fund No. 1 with the intention to short them. When those shares are shorted, they get bought by fund No. 2. Now, Jane wants to short-sell GameStop, too. She borrows those same 100 shares from fund No. 2, and when she shorts them they are bought by fund No. 3. In theory, this process could go on indefinitely, Mr. Hillerberg says. “There is no theoretical upper limit on the ratio of a company’s shares sold short to its free float.”

This illustration assumes the same 100-share block of GameStop is borrowed, shorted, bought and lent out again. In fact, there is no way of knowing whether a particular 100-share block of GameStop stock bought or sold today is the same as what was transacted yesterday. That’s because, once lent, those shares are part of the “fungible pool” of GameStop stock, according to Roy Zimmerhansl, principal at Pierpoint Financial Consulting and former head of global securities lending at HSBC.

As this says, and as I tried to explain in my previous post, for every share sold short, a new share is actually added to the pool of shares. This means that if 38M shares are sold short, there are 70M + 38M = 108M shares being owned by someone, but only 70M of those are actual shares that e.g. can be used to vote at the annual shareholders meeting. When the short sellers are forced to cover, they have to buy back every single share that has been sold short, bringing the total back to 70M shares.

🚀 Availability of shares to cover

“So you’re saying there are 108M shares on the market, and they only have to buy back 38M of them?”

First of all, even if those numbers were correct, it would be a huge potential for a squeeze. But there’s a major difference in how available those 108M shares actually are.

Let’s break down the ownership of GME:

• A large portion is held by insiders (24.6M according to yahoo, I guess this includes Ryan Cohen). These are usually not considered to be “available on the market”, and are subtracted from the shares outstanding to give us the float of 45.3M. (Unless there are some restrictions I’m not aware of, even insiders may in theory choose to sell off their positions if the price is right, but they must report it. Correct me if I’m wrong.)

• A large portion is held by Exchange Traded Funds (ETFs) (16.51%, or 11.5M according to ETF Channel. They have fixed intervals and dates when they rebalance their funds, and won’t sell off their positions in GME just because it squeezes. (But the ones holding ETFs may sell their ETF shares at any time.)

• Some shares are held for hedging purposes by market makers, they will only be sold if their hedging needs change. (Not sure how much this constitutes to, please provide numbers/sources if you know more.)

• A very large amount is held by institutions, most sources say at least 75M (77.4M on Yahoo finance). Institutions are usually in it for the long run, and are known to hold on to their positions through peaks and valleys, and will not liquidate their positions at the first sign of a squeeze. (It is hard to establish exactly how much is held by institutions, because how often they must report their holdings is very limited. Anyone with at least $100M in assets under management must report their holdings quarterly, but may report with up to 45 days delay. But anyone must report no later than 10 days after month’s end if they acquire at least 5% ownership, and must then report within 2 business days if their ownership percentage changes with more than 1 percentage point. This means the numbers for major institutions are fairly accurate, but there can be a lot of smaller whales that go under the radar. E.g. Marketbeat says institutional ownership has increased in 2021, so I’m pretty sure 75 is not a high estimate.)

• A large amount is held by funds, but they report differently, and their positions may be included in the reports from institutions, so I’m not sure this belongs in this list. (Again, correct me if I’m wrong, or if you have some juicy facts or numbers.)

• A huge amount is lent out. If someone sells shares that have been lent out, those shares must be recalled and bought back by the short sellers who borrowed them. And since many shares may have been lent out multiple times, this may even cause a chain where the shares must be bought back many times. This is one reason this may accelerate very quickly, once short sellers start to cover.

Note that the shares held by insiders, ETFs and institutions alone add up to over 111 million, which means that at least 111M - 70M = 41M shares must have been sold short based on these numbers alone, and that the conservative estimate of 38M is in fact too conservative.

All these factors make the number of shares that are “easily available” on the market to cover the shorts far less than 108M, and sets us up perfectly for a MAJOR squeeze. (Still, there is no fixed number of shares that simply cannot be bought. Eventually, if the price is high enough, “any” shareholder may be convinced to sell. In the end, it always comes down to a price. And in theory, all those 108M shares could be sold, AFAIK.)

🚀 AND THEN THERE ARE THE DIAMOND HANDED APES!!! 🦍🦍🦍💎🤲🏼

This is the critical factor, the factor that makes this the MOASS, and not just a SS. Apes are a completely different breed. They don’t fall for their FUD campaigns in MSM, they behave completely irrationally, and will hold until they see the moon in the rear view mirror, just for the fun of kicking hedgies in their nuts. Their FUD campaigns have included efforts to make us believe apes are insignificant in all of this, but we are not!

Nobody knows exactly how strong retail is. One fellow ape argues that retail investors who have invested in GME have invested $2000 on average, and estimates total retail ownership of GME to 40M shares. To me, this estimate seems very conservative, and it is partly based on Swedish and UK numbers, estimating that 1.6-3.3% of retail investors own GME. This post estimates that there are at least 110M American users on various trading platforms, and says 50% of RH (🤮) users held GME in January. I recently saw eToro say 9.1% of their users held GME, and I remember someone saying 7%+ on another major platform. (Please provide more numbers and sources if you know any!) Let’s be conservative and say 5% of those 110M trading accounts hold GME, and have 10 shares each on average. That is 55M shares! (The number of shares held per retail investor is the biggest uncertainty in this post. 10 shares @200 = $2000. People who bought in early, or during the $40 sale in February, would have gotten significantly more for $2000. And $2000 is also just a guesstimate. Many own more, and many own less. Though I can’t be absolutely certain, I don’t think 10 on average is too optimistic. And this is not including Canada, Europe, or the rest of the world! I honestly believe 55M is a conservative estimate.)

🚀 Contribution to the short interest from Retail ownership

So far, we have estimated the short interest to be a minimum of 41M shares based solely on insider and institutional ownership and ETFs holding GME. This number does not include shares sold short to retail, but I don’t think we can use a 1-to-1 relationship here. I believe some brokers hold shares on behalf of their users and include such holdings in their filings, so this will be included in the amount reported to be held by institutions. But I also know some trading platforms actually buy the shares in the user’s name, and those will not be included when they file their holdings to the SEC. So I’m sure retail ownership adds several million shares to the short interest, making even the 41M estimate far too conservative. (Please enlighten me if you know more about how this works.)

🚀 The real tipping point

I believe the main factor in this saga isn’t whether the short interest is this or that, we know it’s huge, and in the end it doesn’t really matter exactly how huge it is. I’ve seen people saying all shares must be bought back because the short interest is above 100%, but that’s not how it works. The fact is that all shares sold short must be bought back. There are just shy of 70M actual shares. If 38M shares are sold short, then 38M out of 38M+70M=108M shares must be bought back, so that there are 70M shares left. If 400M are sold short, then 400M out of 470M must be bought back. It’s never 100%, there are always 70M actual shares that don’t need to be bought back. The major concern is whether or not diamond handed apes control the float.

Case A:
If more than 70M shares (the shares outstanding) are held by diamond hands, there is not even a theoretical way for short sellers to cover their positions without buying from apes, and we can truly just name our price (collectively), and they have no choice but to give in to our demand (without government intervention, at least). If we own 55M (like my conservative estimate), we must rely on insiders to hold strong. I seriously can’t imagine Ryan Cohen (with his 9M shares) would paper hand his position, I suspect he is more diamond handed than most of us, and would love to see the hedgies bleed. I don’t know about the rest of the insiders, but I can’t see what motivation they would have to bail out the short sellers. (As mentioned, we also have ETFs, and market makers’ hedging “on our side”, but I’m too smooth brained to understand how big role these will play.)

Case B:
If we own less than the shares outstanding, even together with insiders and other positions that are somehow “locked up” (I highly doubt this is the case), we must rely on the long whales to hold. In this case, we’re still in for a MASSIVE squeeze, but it’s also more likely that the whales may try to limit the squeeze, like Porsche did in the Volkswagen squeeze back in 2008. After all, if this rocket goes to Andromeda, they may be forced to chip in on the bill through DTCC (if I have understood that correctly), or they may at least experience severe losses in their other holdings as hedge funds are getting liquidated and other stocks plummet, or if the entire market crashes, as some DD have suggested it might. On the other hand, many whales may have the most to gain from a proper squeeze, and may want to join us on the ride no matter where it takes us. If a whale has invested only 1% of their portfolio in GME, it will exceed the value of the rest of their portfolio already at $20k.

The conservative estimates presented in this post puts us close to the “tipping point” between case A and case B. If case A is true, this will truly be the MOASS, and I can almost guarantee that changes in laws and regulations will follow to make sure something like this never happens again. (We’ve already seen all the DTCC rule changes.) Case B is less fun, obviously. We’d have to rely on others, and they might have more complex motives than to just f*ck the hedgies while getting rich. But the more of the shares we control, the more power we have, and the more we diamond hand, the farther the rocket will go. That’s why I call the MOASS a self-fulfilling prophecy. If we don’t believe in it, we will hold back our investments, and paper hand at the first sign of turbulence, and the rocket fuel may run out halfway to the moon. But if we believe in it, we will buy more and control more, and our hands 🤲🏼 will be made into true diamonds. 💎💎 And this will make the squeeze legendary! So I urge you to just BELIEVE IN IT!

🚀 Still have doubts?

Seriously? 🙄

Well, if you still need more reason to believe that we are THE important factor, just ask yourself: If we aren’t, then:

• Why would they run such massive FUD campaigns in MSM?

• Why would they infiltrate our subs?

• Why would they try to get our DD makers banned, and even send them death threats?

• Why would they try so hard to make us fold if our hodling didn’t matter?

It’s not hard to see that they are afraid of us!

If you fear all the hedgies have covered their shorts, just remember:

• Even the official number of 10.19M is very high, and does not include ETFs containing GME that have been shorted.

• Virtually no GME shares are left to be borrowed, which means a lot have already been borrowed and sold short.

• Using publicly available ownership numbers, we can conservatively estimate the short interest to be at least 41M shares, not even counting for the contribution from retail ownership, which must be several million shares.

• Excellent DDs have revealed major trickery with naked shorting and resetting FTDs using options and conversions, as well as shorting GME through ETFs.

• The stock price of GME is obviously heavily manipulated, like that 50%(!) drop we saw on 3/10 (that curiously was reported by MarketWatch before it even happened!) This is not natural behavior for a stock, but obviously planned scare tactics to shake off paper hands. Why would they want to scare us, if they had nothing to lose?

🚀 Worst case scenario

If you’re still scared, let’s look at what you have to lose.

Even if I’m completely wrong, if the shorts have pretty much covered, if retail holds an insignificant portion of the float, if most apes will paper hand, and there’ll never be a squeeze, even then, we have not lost! Then we are simply left with a regular stock, and must do a conventional value analysis. Remember that Keith Gill (aka u/DeepFuckingValue, aka Roaring Kitty) is a value investor! He’s invested in this stock because he sincerely believes in it. I bet no single person has spent more time analyzing the true value of GME, and he didn’t sell at 480, and he is still hodling! He sees enormous potential in this company, and I for one am also convinced that Ryan Cohen can turn GME into a successful e-commerce company that delights gamers. Even some traditional analysts are realizing the potential for GameStop, and have increased their one year price target to $175.

I sincerely believe the worst case scenario is that we will see GME grow into a highly valued stock, as Ryan Cohen turns the whole business around.

🚀🚀🚀 TLDR / Summary 🚀🚀🚀

Conservative estimates imply the short interest of GME is beyond extreme. Even the official short interest (10.19M shares, or 14.6% of shares outstanding, which I believe is complete BS) puts it in the category ‘very high’.

No matter if the short interest is extremely high, or just very high, we are still in for a massive squeeze, because all shorts must eventually cover, and this stock is only going up.

The main factor in this saga is NOT the magnitude of the short interest, but how much of the stock that is held by diamond hands. Every share we hold is a share they cannot use to cover.

If retail controls the entire float (and relatively conservative estimates say we do), we can literally just name our price (collectively) once this rocket launches.

If we don’t control the float alone, we are still in for a massive squeeze, but must rely more on long whales to hold with us. In this case, how far into space we’ll go depends on how much we hold, and how diamond handed we are. That’s why I say it’s a self-fulfilling prophecy. If we believe in it, and continue to buy and hodl, the MOASS is simply inevitable!

We have everything to gain, and literally nothing to fear. Holding doesn’t cost us anything, and the worst case scenario is that we have invested in an excellent stock. Our own value investor DFV did not sell at 480, and even conventional analysts have set the one year price target to $175. I believe Ryan Cohen and the team he is assembling will take GME to new heights, even without a squeeze.

TADR: Buy and HODL! 💎🤲🏼🦍🚀🌙

Edit:

Exit strategy

As I mentioned, when all shorts have covered, there will still be 70M shares left that have not been bought. (The original 70M shares outstanding.) Does that mean there will be 70M shares held by bag holding apes? When the squeeze is over, I think much of the 70M will still be held by insiders, ETFs, funds, and large institutions. However, quite a few shares will most likely be held by apes as well, but keep in mind that the infinite squeeze will last as long as apes continue to hold the float! If apes own the entire float, plus at least one share per ape, apes may in fact maintain the infinite squeeze until all apes have sold at least one share at their desired price!

I won’t disclose my exact position, but I’ll just say I own more than 10 shares. As long as there’s an infinite squeeze, I can sell one of my shares at pretty much any price I want, so there’s no reason for me to sell more than one. If I get to sell the one share at my personal price target, I will gladly hold my remaining shares to the very end, and do my part to maintain the squeeze and bleed the hedgies dry, as well as letting my fellow apes cash in.

This only works if most apes sell really slowly! If lots of apes start to sell off their entire positions, or start to panic sell, apes will quickly own less than the float, and the infinite squeeze will be over. The longer apes hold, the harder this will squeeze.

I believe it’s in the best interest of all apes out there to sell as slowly as possible! Spread the word!

Edit 2: Removed some “we”s etc. from my exit strategy after concerns were raised that phrasing my exit strategy like I originally did might be construed as attempted market manipulation. In the end, anyone reading this is just an individual ape doing whatever they want with their own money.

I am not a financial advisor, and I’m heavily invested in GME. This post only expresses my personal opinions.