| Author | Source |
|---|---|
| u/hell-mitc |
This is a bit fucked up. I’m super disappointed it’s mother’s day and I had to tell my mom that my wife is pregnant with our boyfriends baby and I couldn’t even gift her a lambo. I didn’t even take my own advice about the clown world pyramid scheme and decided that GME should be able to feed me instead of billionaires who definitely have my best interest at heart.
So, here’s another little bit of info I am interested in seeing what everyone else thinks.
After reading some DD over the weekend about Citadels balance sheet, the hypothesis about their algo betting against retail, and creating a short position depending on a purchase because the average rate of hodl has gone from 7 years –> 100 days, and how auditors held the cards in 2008 and profited $300M+ when Lehman and Bears went belly up, I think we are on to something fucked when we see their X-17A-5 in the next week (might be longer because we know these guys are ok with fines from the SEC instead of submitting filings on time).
I’m going to dissect their balance sheet a bit here and create a hypothesis on how this legit almost bankrupted the system, and how they tried to hide this when the upcoming bloodbath occurs.
Their 13F-HRs will be revealing if they chose to actually input their GME puts and naked data, and Kenny Boi just received a lifetime achievement of best risk management (haha until now I guess – and whoever makes that decision must have made a boatload of money off the guy).
Anyway, here we go.
These lines in the next week are going to be pretty revealing. EVERYONE HAS TO FILE THEIR 13F BY FRIDAY.
Securities sold, not yet purchased is already a huge liability for them, only balanced in their by securities owned.
One thing about GME, is the price was $18.84 on Dec 31, 2020.
Their net naked position based on these numbers are as follows:
Negative for purpose of short position
Ill use puts as a negative as this would be the shares they have to purchase at market (if they stayed naked puts in this case)
In December, GME was nothing but a $5,525,169.12 liability on their balance sheet. 293,268x18.84. Net naked puts would be 2933. Someone correct me if I’m wrong, but I don’t think so ;).
So for some reason, they thought they should increase their GME put position by 35k puts? That seems weird (and absurd unless you really wanted to bankrupt a company or had insider info into the fact that they would bankrupt) which is why the hypothesis of creating a position every time an order was routed through their securities arm makes sense.
I can’t see a multibillionaire being that concerned about some small retailer position, unless for some reason your retail screwing arm (robbinhoods) had some specific code you piggybacked off to help fuck over retails impatience.
Anyway, lets throw some more quick napkin maths out. They obviously would have had a huge liability on their books (3,700,000 shares * $20 = $74M). With retail starting to realize Blackrock, Vanguard, RC Vent, and DFV were posting share buys for long positions and causing upward buying pressure compared to day trading dummies, we see that 130x buying pressure that someone whispered. 3,700,000*150 (or 300 or 480) = anywhere from 550,000,000 to 1,775,000,000. Not to mention the float is fucking TINY like.. well..
That is JUST CITADEL having to go to market to buy 3.7 million shares. Not to mention Melvin, Suspecthanna, BagHolders One, etc. AT THE SAME TIME TO HEDGE THEIR PUTS. The upward buying pressure would have caused GME to legit go to (warden if you want to speak up here), I dunno, 2, 3, maybe 4K? Not to mention retail and day traders realizing the massive fuckup and buying in? Maybe 5-10K if they were lucky.
If we quantitatively take into account the algo HAVING to buy at whatever price to hedge the bet (because you cant sell option calls quick enough), then they are talking losses of probably (in order to beat theirs and the others algos) of $10-20B, each (if going by ratio of citadels alone necessity to buy).
Here’s the fun part.
Can you imagine Citadel having an ~$20B loss on their balance sheet? They are a $300B+ hedgefund. They would feel a sting (if the market remained without any changes). These losses would have flowed to their income statement, then their retained earnings, which would have caused a lot of investors to pull some funds. I mean, if your money guy lost 30% of their balance sheet, would you trust them?
Let’s look at how this creates an even bigger issue beyond Citadel.
Suspecthanna, would have folded and had their fund liquidated immediately. Melvin, would have had their portfolio liquidated immediately. This would have created a FUCKING MARKET BLOODBATH. Completely unbeknownst to anyone other than DFV apparently who was combing through these filings and throwing out his knowledge the best he could. The banks got caught with their pants down. Funds short got caught with their pants down. THE ENTIRE MARKET WOULD HAVE COLLAPSED (speculation, but my napkin math and knowledge is pretty fucking close I think). That’s why this wasn’t (and there was not) a margin call. They were scared of margin calls. The banks, DTCC, everyone else who waived the problem that became so close, was scared that they didn’t know it was going to happen. Now, they know, and have had to create a nightmare to hopefully hedge some positions that have been created. That’s why we have been seeing market crash news randomly on marketwatch and CNBC, etc. That’s why we have been seeing GME pop back up in popular places. Billionaires are offloading wives in order to save some fortune when this bubble pops. They can’t let it not pop, and they know they have to let it happen to maintain the face of a free and fair international market that has been 100 years in the making.
This is going to happen, and the only reason it didn’t sooner was because they couldn’t let retail have all the tendies, it would have legit caused a transfer of wealth. The wealth will transfer, just from where it can be sacrificed. Smart money is moving it to places that is just going to continue to feed the status quo.
The gme meltdown stuff is to demoralize enough to sell so they can retain some control over how high this really goes. It isn’t about chirping us. Just making each other second guess. Be patient, read the DD (double check everything because even the dumbass shills are trying to post DD now, and think we wont notice that 13F fillings differ from what they are trying to say). Small puts like Cowen and Co, are going bankrupt because they cant unwind their positions or hedge them. Big securities dealers HAVE to sell to retail because we aren’t pros and don’t have insider knowledge, we just like the stock. They HAVE to sell it to us. Funds, that is different. Selling to funds means they can shut down their buying because they cant find the shares. Weird shit is going on behind the scenes that we can’t see. And they are about to let the bomb go off because it can’t be diffused.
Who is on the losing side? Anyone with a put that they can’t write off. Why not sell them? Because who the fuck is going to buy a put on GME right now lmao. I would literally hang up the phone on some idiot asking. Otherwise, these small guys, would have offloaded them already. But they can’t.
Anyway, this will blow up in their face. I am confident and hope you guys are too (200k of you because my reader average is about 500). Just hold, relax, and be smarter than the shorts and people trying to convince you otherwise.
Cheers guys.
Edit: sorry guys I have something backward, my bad. They are most likely the owners of their naked puts, but are writing naked call options (not puts). Ill include it in the next post when I get a chance to review the FTD theory hiding.
