A small recap of GME - Shorts are fucked

HODL 💎🙌

The list below is how I understand the events of GME based on the DD I’ve read across all investment subreddits, but especially this one. Correct me if I get any parts wrong, and I’ll edit

The Recap:

1) Hedge funds colluded with market makers to short GME over 140% and likely over 200%

2) Hedge funds have not closed these shorts, but only hidden them in options chains, so they don’t need to be reported, and have since moved on to short the stock through ETFs and other mechanics.

(Short the ETF and buy every share in it except for GME, to effectively just short GME EDIT: or as u/dubaicurious explains, borrow ETFs, break them down into individual shares, and sell the GME) This is not reportable as a GME short, hiding the true SI%.

This Friday, 430K (43 million shares) Deep OTM Puts expired, which were previously used to hide 43 million short shares. With this expiry, the shorts should show back up on hedge funds’ books and require margin coverage, unless they deliver all of them through other mechanisms.

3) Lawsuits allege over 200% SI in january (at 100m shares), which was at the time well above the legal limit of 140% (source needed). This corresponds to what users in this subreddit can support using options data from January (Deep ITM calls and deep OTM puts at the same strike price)

4) Buy orders vastly outnumber sell orders, some days over 7:1 ratio, and apes know short hedge funds must buy back GME shares to close their debt. Similarly, since the price stays stable or even drops, the logical explanation is that hedge funds continue to naked short GME to avoid the price exploding upwards.

5) GME has not yet announced a dividend, but has revealed in their market offering prospectus that they may give a non-cash dividend. This could make it very hard for the DTC to distribute said dividend, at which point Gamestop may move their shares out of the DTC. This could trigger a short squeeze.

• Similarly, as hedge funds keep shorting GME, if there’s a financial crash, their collateral used as margin to allow their short position may drop significantly in value, and it may no longer cover their margin requirements - this could trigger a short squeeze.

• Third, new regulations may make it tougher to hide shorts through obscure mechanisms, and put a more realistic or accurate number on their books, which would increase their margin requirements drastically - this could trigger a short squeeze.

• If the price drops significantly (say to $50 or less), Gamestop could announce a share buyback, and use some of their cash they got from the ATM share offerings to buy back more shares than they sold - this would reduce the free tradable float and spike the relative SI%. Similarly, the buy pressure from retail would increase drastically - this could trigger a short squeeze.

• If hedge funds keep selling naked shorts, eventually the SI%, hidden or not, will be so high that they will fail any factual liquidity check. Similarly even a cash dividend, they’d be required to pay out many times over, which would eat into their liquidity. This could trigger a short squeeze.

• As Ryan Cohen keeps developing Gamestop into the business it deserves to be - an online powerhouse poised to compete with Amazon, the straight up fundamental value of the stock will so obviously be above what it’s currently trading at, that buy pressure increases drastically, on a global scale. This could trigger a short squeeze.

TL;DR

So long as people refuse to sell their shares, shorts cannot avoid any of these risks, and cannot close their debt. They have a foot in the beartrap and there’s hungry wildlife around.

Shorts are super duper fucked

Did I get this right?

this is not financial advice