| Author | Source |
|---|---|
| u/tacosformysadness |
Ok, I’m just gonna get right into the meat and potatoes. I am not an expert. I’m not a financial advisor. I’m quite a smooth brain and I’m putting my thoughts out there to learn more than anything. Please correct me on any mistakes I am making. But given my knowledge, this is what I see. *Also note I wrote this to share my thoughts with family members and friends who arent involved in this (yet!) so forgive some of the oversimplifications of some parts and over-explaining of others
Between the top to index funds containing GameStop and the top ten institutions holding shares, the % of total shares held is already at 214.93% (PLEASE see edit 1 for a correction of this claim), or OVER A HUNDERED AND FIFTY MILLION SHARES. With the total number of shares held by the company and not put out for sale equaling about 20 million of the 70 million total of the company, only 50 million shares should be held by outside investors and able to be actively traded. Ownership by institutions and mutual funds is already triple this (FIRA data taken from https://finra-markets.morningstar.com/MarketData/EquityOptions/detail.jsp?query=126%3A0P000002CH&sdkVersion=2.59.0).
Not only does the price reveal the falsified nature of the reported short interest (the fines for lying about this are pennies in comparison to what they have to lose), but also has some incredible implications for the magnitude of the squeeze.
Where do these shares come from? Hedge funds writing NAKED SHORT CONTRACTS in which they sell a shorted share despite it not actually existing or being held by the fund. This allows them to drive stock prices down by diluting the market and has long been a scummy tactic for making a quick buck by shorting a stock, driving the price down, and profiting off the dip. They have been using these same tactics to try and shake investors off of GameStop. It has fortunately not worked and now they are in deep shit. This number of shares held by institutions alone (which doesn’t even account for the mass of retail investors who have been religiously picking up shares over the past few months) implies at least a 200% short interest. That is a historic level and, given that it only accounts for the top to mutual funds and institutions, is likely much lower than the actual number. THAT’S INSANE and if this thing ever gets off the ground the price could go up tens, even hundreds of thousands of dollars within a matter of days or even hours. This is a powder keg waiting to explode and hedge funds long on the stock (who believe the price will go up and are on the side of the squeeze) are doing everything they can to make it happen. It honestly just seems like a matter of time.
Price Dips:
As of the last trading day, April 9th 2021, the price of GME dropped approximately $12 a share. Normally, price drops of this magnitude indicate selling from investors exiting their position on the stock. These drops also have a psychological effect in which people panic sell to exit a falling position.
So, what was the buy/sell ratio of Gamestop by retail investors? OBVIOUSLY, a day this far in red would both be caused by, and cause, people to sell off their shares? Right??
Well, if we take a look at Fidelity, an investment platform for retail traders, Gamestop had a 5 to 1 buy/sell ratio. For every sell transaction input to the broker, approximately 5 buy orders were placed. That’s incredibly impressive even on a green day, but downright insane on a day this far in the red.
This shows two things:
1. The price drops are not caused by people selling their shares.
2. The price drops are not having the desired effect of shaking off investors.
Hedge funds short on the stock have multiple ways to drop the stock, either by selling further naked shorts or other, more complicated methods. It’s highly unlikely that these dips are the result of anything other than this manipulation. Fortunately, they aren’t working, and if anything, are just digging the hedge funds into an even deeper hole once they are forced to cover.
Media Misinformation and Corruption:
Checking the news evidently gives a very bleak outlook on the Gamestop situation, with articles for months reading ”Forget about Gamestop”, ”Gamestop is over, check these stocks out instead”, ”Retail investors Burned by GME pump and dump” etc. They have been saying this is over since the first squeeze. They said it was over right before GameStop soared again all the way up to 350/share last month. They do not cover any positive news on Gamestop, and even spin the positive progress towards transforming the company in a negative light (when certain executives resigned and were replaced by hard hitting ecommerce leaders handpicked by Ryan Cohen, most media outlets painted the departure as them jumping from a sinking ship rather than the incredibly positive change for the company it actually is). They have proven, time and time again, that they are not on the side of truth but on the side of the wealthy investors trying to cover their own asses by filtering what sort of content is published by the media outlets they have so much sway over. The research speaks for itself. I believe that a hell of a lot more than the unsupported, uncited, hit pieces that try to divert attention from the mess Melvin Capital and Citadel (and friends) have gotten themselves into. As indicated by the buy/sell ratios on retail investment platforms, so do most investors. People are not falling for this. Most retail investors are simply buying our time and waiting for the inevitable catalyst that sends us into space. By bombarding investors with constant waves of Fear, Doubt, and Uncertainty, they have only hardened our resolve and proved the lack of weight behind their words.
TLDR:Â I like the stock. If you like the stock just HODL. Cracks are forming on the short side and this thing is primed for liftoff.
EDIT1 please read: It has come to my attention that there are repeated institutions and funds on the FINRA data. While I believed in the legitimacy of the data and assumed these were slightly different from each other (that happened to share similar names), it is now clear that the data itself is flawed in that it reports multiple entries for firms like Fidelity and Blackrock. HOWEVER, if we recalculate these values while eliminating duplicates, we still end up with ownership of 59,815,466 shares, which is equivalent to about 85% of the total shares and 132% of the float. While not the home run value I reported previously, this is still incredible news. Keep in mind that this is just the top 10 (or really top 6 after removing duplicates) institutions and we already have ownership of more than 100% of the float. Including smaller institutions and what I suspect to be a further 100%+ ownership by retail, this stock is still primed for the ride of a lifetime.
