Gamestop's most recent 8-k filing - intent to issue a share dividend (Now confirmed on 7/6)

[the]

https://gamestop.gcs-web.com/node/19686/html

For those uninitiated, the Gamestop saga is still going. Despite it not being in the news recently, the prices in the past 3 weeks have gone from ~$80 a share, to over $200. Today, the company announced their desire to issue a stock dividend. This could be a 1:2 or 1:4 split for example, meaning your 10 shares turn into 40 once they split. But the big news here is what happens when a forward stock split occurs.

There is some speculation here. In order for a dividend to happen, it may first be necessary for outstanding shares to be recalled. The thesis behind Gamestop suggests the company is severely naked shorted, which means hedgefunds have been selling shares that do not exist. Think of it like this, you have the title to your GTI, you make 8 copies of it and sell it to 8 people, but only 1 car exists. That's a laymans naked shorting situation explained.

Gamestop currently has 300,000,000 authorized shares, and of those shares, only 75,000,000 are actually issued. What this may suggest is 225 million shares are naked shorted. So in the event a share recall is issued, hedgefunds have to scramble to buy 225 million shares, and they have to buy real ones.

Who has the shares? Well... we do. The big motivation behind Gamestop shareholders for the past year has been direct registering their shares with Computershare so they can't be loaned or shorted. The most recent Q4 earnings report tells us over 10 million shares have been direct registered.

So to recap, there are 75 million real shares. Over 10 million of those shares are held directly by the common folk investor. Hedgefunds who have sold naked short shares of Gamestop will be responsible for purchasing those shares back during a share recall event. They would need to purchase every single share four fucking times before they are able to cover. The only way to do that, is to purchase our shares. This means we get to decide the price, and if they don't want to pay, they get liquidated, and a computer at the DTCC takes over, and that computers only job is to buy the available shares.

So if I want to list 10 shares for $250,000 each, I can, and if that is the next trade on the list, the computer buys it. Shit just got crazy, and Gamestop is blowing up the stock market on April Fool's day.

edit: Hedgefunds have 30 days to cover once a share recall is issued. So the market might not *explode* tomorrow, but the news after market close means huge price action and a huge fuck you to hedge funds on 4/1/2022.

edit 2: Another possibility is a massive price spike due to the stock split dividend. Since this dividend of shares is being given to shareholders, hedgefunds will be responsible for providing the same amount for the shares to everyone they sold naked shorts to. Say the dividend split was 5:1... hedgefunds are now responsible for providing that 5:1 split for the 225 million shares they sold as illegal naked shorts.

exciting news!

edit 3: changing the wording from "split" to "dividend"

 

[gixxerfool]

Well, thank you for explaining that. I dont know much about the market, hence why the stocks I do have, which are very little, do nothing. I feel like if I dont know enough, I know enough to get in trouble. I was going to buy GS but thought it had died down, since I dont know anything, see a theme here? But this is a ridiculous position to be in.

My question is this, how are they able to sell shares that do not exist? Seems illegal.

 

[the]

My question is this, how are they able to sell shares that do not exist? Seems illegal.

It is illegal. Investopedia

The SEC outright banned it in 2008 after the market crashed. There is lots of speculation we are right back in the same bubble we were in then. The problem is rules aren't being enforced and nothing has been done about it.

 

[gixxerfool]

It is illegal. Investopedia

The SEC outright banned it in 2008 after the market crashed. There is lots of speculation we are right back in the same bubble we were in then. The problem is rules aren't being enforced and nothing has been done about it.

Oh. Then there you go.

Wasnt that bubble cause by the housing market being over inflated? Or are you saying same scenario, different cause?

Interesting. Here I thought everything was tracked so well, you couldn’t do something like this if you wanted to.

 

[the]

Wasnt that bubble cause by the housing market being over inflated?

Yes, and the market was over-inflated because lenders were giving adjusted-rate mortgage loans to anyone. The loans turned out to be backed by trash, and once the market began to collapse, the adjustable rates on those mortgages jumped by insane amounts. Suddenly a month's rent was 8x higher.

Or are you saying same scenario, different cause?

This is what I mean, yes.

 

[brat_burner]

You could buy a house with 0 down AND they'd cut you a check back then...

 

[shovelhd]

Yes, and the market was over-inflated because lenders were giving adjusted-rate mortgage loans to anyone. The loans turned out to be backed by trash, and once the market began to collapse, the adjustable rates on those mortgages jumped by insane amounts. Suddenly a month's rent was 8x higher.


This is what I mean, yes.

Not only that, the junk loans were being bundled in with conforming mortgages and sold on the market as CDO's (collateralized debt obligations) promising guaranteed returns for investors. The junk mortgages got called, the CDO's didn't deliver their promised return, and the house of cards started to burn. Meanwhile big banks that made fortunes on this stuff got bailed out, and people who should have never gotten a mortgage to begin with got relief.

 

[Acadia18]

I'm sorry, but there's nobody more delusional than somebody who drinks the GME koolaid...

I'll check back on May 1st because that's after the outlined 30 day period. 500 Ricketybux says this huge "MOASS" hasn't happened.

tl;dr: It's never going to happen.

Edit: I can't find the post, but aren't you the same person who was super positive Loopring was going to be $10 by the end of 2021? It could have been someone else here saying it...

 

[the]

I'll check back on May 1st because that's after the outlined 30 day period. 500 Ricketybux says this huge "MOASS" hasn't happened.

What exactly are you checking back for? Gamestop was ~$80 in the middle of March, it hit $200 this week. This price movement is already more significant than 90% of price movements on the market. The price surge has happened like clockwork every ~3 months for the past year and a half (minus two cycles). I'll continue to profit off of the obvious pattern in price spikes, if the only downside is being called a kool-aid drinker, that's fine.

Edit: I can't find the post, but aren't you the same person who was super positive Loopring was going to be $10 by the end of 2021?

I've had a lot of positive things to say about Loopring. Here's an example.

On December 7th, I said Loopring would announce a partnership with Gamestop before primetime was talking about it. I said after Gamestop announces, the value of loopring would "jump through the fucking roof."

Week of March 21st - On the announcement news alone, the value of Loopring increased by 50%.

https://cointelegraph.com/news/loop...50-after-gamestop-nft-marketplace-integration

https://twitter.com/i/web/status/1506548697689063429

Yes, crypto is volatile. Yes, it goes up and down. Yes, I believe LRC is still a great coin to hold through 2022. This is because I believe the store will eventually drive the value of LRC and IMX past the value the announcement placed it at. Yes, the value of LRC has decreased since the news... but you don't lose anything unless you sell. The store is still in beta (https://beta.nft.gamestop.com/), it actually needs to launch and use LRC layer 2 protocol to make crypto transfers for the value to increase. I really have nothing to offer for people who held for two weeks / two months and then sold at -12%. If you're going to buy high and sell low, maybe investing/fundamentals 101 course would be a better use of your time. The answer is to hold, this isn't a get rich quick scheme, most investments should be held for more than a year to avoid short term capital gains tax anyway. I have been holding shares of Gamestop since 2020, I have invested more during dips, and sold shares/options in the 3 month spike cycle multiple times. Whether or not you believe this is real makes no difference to me, there has been two whole years to figure it out and make it profitable. It's a little late to be on the sidelines, speculating while waiting for something to happen.

 

[Acadia18]

What exactly are you checking back for? Gamestop was ~$80 in the middle of March, it hit $200 this week. This price movement is already more significant than 90% of price movements on the market. The price surge has happened like clockwork every ~3 months for the past year and a half (minus two cycles). I'll continue to profit off of the obvious pattern in price spikes, if the only downside is being called a kool-aid drinker, that's fine.

Don't get me wrong. There's real money to be made in GME, doing exactly what you're doing. What I'm talking about and what I'll be checking back for, is this magical share recall, hedge funds forced to cover, and people selling their $300 GME for $1,000,000 because the computer forces the order.

So to recap, there are 75 million real shares. Over 10 million of those shares are held directly by the common folk investor. Hedgefunds who have sold naked short shares of Gamestop will be responsible for purchasing those shares back. They would need to purchase every single share four fucking times before they are able to cover. The only way to do that, is to purchase our shares. This means we get to decide the price, and if they don't want to pay, they get liquidated, and a computer at the DTCC takes over, and that computers only job is to buy the available shares.

So if I want to list 10 shares for $250,000 each, I can, and if that is the next trade on the list, the computer buys it. Shit just got crazy, and Gamestop is blowing up the stock market on April Fool's day.

edit: Hedgefunds have 30 days to cover once a share recall is issued. So the market might not *explode* tomorrow, but the news after market close means huge price action and a huge fuck you to hedge funds on 4/1/2022.

That part. If you believe that will ever happen, you've been drinking the kool-aid. That will never happen.

 

[the]

What I'm talking about and what I'll be checking back for, is this magical share recall, hedge funds forced to cover, and people selling their $300 GME for $1,000,000 because the computer forces the order.

Well, there are two things being discussed here. The potential share recall is being described as a catalyst for margin call. The current data suggests total available shares vs shares issued is in such a state of flux, it would be impossible for hedgefunds to cover their short positions in this kind of event. All we can do here is look at the data provided to us and speculate. Regardless, at the very least I hope you have at least consumed the data. Particularly the rising reported SI (Short interest), and the borrow rate for Gamestop shares, which has increased from 0.5% up into the 20s as of late. Also, the data that we have followed for the past month. Ortex data tells us GameStop shares have reached a utilization of 100% for more than 30 days now. This means that all its available shares have been borrowed and there are none left to be shorted. Which is what the increasing borrow rate was trying to tell us all along.

The bit about being forced to cover via the DTCC computer is operational procedure. Once a margin call occurs and causes a default, the DTCC takes over and the only job is to bring outstanding balance to zero.


So the potential series of events we're looking for here is

1. Event that sparks a share recall (Possibly this dividend announcement, possibly the dividend)
2. Hedgefunds being unable to find the shares, because 225 million of them do not exist
3. Hedgefunds being margin called, and defaulting
4. DTCC taking over, money computer go beep boop

I can understand why this doesn't seem likely in the grand scheme of things. I have been following and collecting data for 2 years. Admittedly, it's very difficult to give a TLDR of it all when asked. There is so much to digest. https://gmedd.com/ is a pretty good place to get all caught up. While it's fine to assume none of this will happen, I would say the first requirement of doing so is digesting the data.

 

[brat_burner]

GME was +27(after hours), immediately tanks when the market opens

 

[Daks]

Well, there are two things being discussed here. The potential share recall is being described as a catalyst for margin call. The current data suggests total available shares vs shares issued is in such a state of flux, it would be impossible for hedgefunds to cover their short positions in this kind of event. All we can do here is look at the data provided to us and speculate. Regardless, at the very least I hope you have at least consumed the data. Particularly the rising reported SI (Short interest), and the borrow rate for Gamestop shares, which has increased from 0.5% up into the 20s as of late. Also, the data that we have followed for the past month. Ortex data tells us GameStop shares have reached a utilization of 100% for more than 30 days now. This means that all its available shares have been borrowed and there are none left to be shorted. Which is what the increasing borrow rate was trying to tell us all along.

The bit about being forced to cover via the DTCC computer is operational procedure. Once a margin call occurs and causes a default, the DTCC takes over and the only job is to bring outstanding balance to zero.


So the potential series of events we're looking for here is

1. Event that sparks a share recall (Possibly this dividend announcement, possibly the dividend)
2. Hedgefunds being unable to find the shares, because 225 million of them do not exist
3. Hedgefunds being margin called, and defaulting
4. DTCC taking over, money computer go beep boop

I can understand why this doesn't seem likely in the grand scheme of things. I have been following and collecting data for 2 years. Admittedly, it's very difficult to give a TLDR of it all when asked. There is so much to digest. https://gmedd.com/ is a pretty good place to get all caught up. While it's fine to assume none of this will happen, I would say the first requirement of doing so is digesting the data.

What's your take on BTC now, buy?

 

[the]

What's your take on BTC now, buy?

If you're looking for 10 year investments, you would probably be better off picking some ETFs to invest in. To be perfectly clear, I don't know anything about bitcoin.

GME was +27(after hours), immediately tanks when the market opens

Yea the announcement certainly didn't propel it into a spacewalk like I wanted. Still very bullish on the split.

While we're talking about splits, Tesla just announced another potential 5:1 split on their stock. If you followed the last split saga during covid, you know these price action is going to be fucking bonkers. The last 5:1 stock split was in August 2020, and result in a 71% increase in price between the news of the split, and the split itself.

https://www.nasdaq.com/articles/why-tesla-shares-skyrocketed-in-august-2020-09-06

https://www.barrons.com/articles/tesla-stock-split-51648464480

 

[the]

Stock split-dividend announcement comes through today, 4:1 dividend is incoming.

For you this means - for every 1 share you own, you will receive 3 more.

For naked short sellers this means - for every share they sold short, they must buy back/provide 3 more.

https://gamestop.gcs-web.com/node/19826/html

Tomorrow will be a massive options trading day. Price action throughout the rest of the month will be interesting as short positions close.

Price 117.43 @ market close July 6, 2022.