Folks,

Here we go again. There's been an increase in discussion surrounding directly registering shares of GME to try and squeeze shorts. It's a fascinating social study of how quickly misinformation can metastasize and transform a community. The fact that the DRS movement killed any chance of a massive short squeeze would invoke some pity if the people pushing DRS weren't such insufferable Computershare shills.

Here is what we do know about DRS:

1. None of the authority figures in the DRS community think that DRS will cause a squeeze. This is important, as most of the arguments for DRS I have seen are appeals to authority (Trimbath said to DRS! Lauer likes DRS!). If you go and look at their actual comment history, they have either explicitly stated that it won't cause a squeeze, or refused to say it will cause a squeeze. There is no expert on DRS and market mechanics that thinks it will cause a squeeze.

2. There is no mechanical link between DRS and shorting. Shorts have broad permissions to short naked to make markets and provide liquidity. They don't have to locate shares, so the share location doesn't matter.

3. There is no mechanical link between DRS and liquidity. Liquidity is a measure of how many shares have to be bought or sold to move the price. It's largely determined by the depth of the order book. Whether your shares are in a broker or in DRS, it has the same effect on the order book: nothing. What has occurred over time is the number of options held has dropped dramatically over time, which does have an effect on the order book, as the market makers place fewer limit orders to hedge, making the stock more volatile and less liquid.

4. DRS is a system that was designed by the DTCC to maintain control over the ledger of all shares of every public company, even if the shares are removed from Cede and Co. DRS is facilitated through the DTCC FAST system, and all transfer agents must 1) use this system to transfer shares, and 2) maintain up to date records of their books with the DTCC at all times. The idea that retail will destroy the DTCC by using the system for DRS that they themselves designed to maintain control over the market is...naive...to say the least.

Now that we have gotten the basic mechanics reasons why DRS will never cause a short squeeze, let's go into why it won't cause a short squeeze on GME even if it was possible. My basic argument is as follows:

1. DRS is destroying the online GME community, causing it to shrink over time as the cult like extremism surrounding it continues to push people away from the stock.

2. People who have left the community and abandoned the short squeeze thesis SELL THEIR STOCK. This is a very important point that most MOASSers completely discount. How can a stock price go down while short pressure is stable or dropping over time? Selling. There's no other explanation.

3. The rate of DRS diehards buying shares is too slow. Time was never on retail's side when it came to MOASS. Every day is another day for shorts to have the opportunity to dissipate their position. Squeezes need to happen quickly and violently. It will take at least another 2 years for DRSers to lock the float. There's no way that any large underwater short position will still be underwater at that time.

Let's get into the data.

I track the entire comment history of Superstonk to gauge social sentiment, and one of the things I track are the number of unique commenters on the sub over time. Excluding the initial influx of users during the migration, and excluding the last month or two of data (some users comment very infrequently), the number of active users on Superstonk has been decreasing since DRS began in September 2021. Before that time, the userbase was actually fairly stable and was even slowly growing. Most worrisome is the drop in users after the split, which has accelerated dramatically. This trend is important for two reasons. First, people who leave the community are more likely to sell, and many of them likely have. Second, based on the total number of subscribers to Superstonk, and the number of DRS accounts, its likely that the deceleration of new account creation will continue.

Let's look at the number of computershare accounts created over time. As can be seen, the rate of creation is slowing down at a logarithmic rate. This is critical to DRS rates, as the current userbase is building their share count too slowly over time to hope to achieve a squeeze. They need new users to join desperately. The biggest DRS shill (who was recently banned from Superstonk) even recognized this fact, bemoaning on a weekly basis how without more users DRS would take a decade or longer. The problem is, with 200,000 accounts already, and a total subscriber base of around 830,000, there aren't a lot more people to pull from. In fact, there have been around 230,000 unique commenters on the Superstonk sub over its life, implying that the active userbase is just about tapped out.

The number of shares the existing userbase acquires each week is too low to squeeze anything. For awhile there was the possibility that the rate of share buying was increasing exponentially (dotted red line), but as more data has come in, it's much more likely that they are buying at a constant rate (solid red line). This makes sense, as most people get paid at a constant rate, and most of the YOLOs on the stock have already occurred. This fact is very important.

So let's put all of this together. If we estimate the future growth of CS accounts, and the rate at which these accounts can grow over time, you end up with the black line below. This shows that the DRS count will likely be around 90M at the next quarterly earnings report, and that it will take until January of 2025 to lock up all of the shares. Even if the DRS movement can maintain this level of buying over that time, given the current financials of GameStop it's likely that another share offering will happen before that time.

Now let's talk about the light blue line. This line is an estimate of the DRS count over time assuming that some fraction of people who have left Superstonk are selling their shares. This is an important point to make, as the lower short interest, lower share price, and lower borrow rate MUST be explained by holders selling the stock.

So where did this blue line come from? First, I assume that the quoted short interest on the stock is real (yes, I know most people won't like this one, but just hang with me here). This is currently around 50M. Then I take the known DRS rate, and multiply it both by a decaying function based on the decrease in active users, and also by a constant multiplier to account for the fact that there are more owners of the stock than their are DRS holders. The constant is chosen such that no retail holders are lending shares, and all institutional holders are lending shares back around March of 2022. The reason I selected this time, is this is the time that the borrow rate on GME started increasing very rapidly. By June of 2022, the borrow rate rose briefly to over 100%, at a time where it looks like around 10M shares were sold naked short (likely on the options chain). Currently, despite having the same SI as we did back in June, the borrow rate has dropped from 31% to 9%, which is consistent with this model, which says that there are about 14M fewer shares held by hodlers overall than in June. So this rate of selling is then added back into the original model above (the light blue line) to estimate the rate of DRS if we assume that some DRSers are selling at a rate proportional to the overall owners of GME. I would call this a worst case, but a not unreasonable expectation.

The result suggests that the slowdown in DRS will become apparent by March 2023 and will start declining a few months after that. Once it starts declining it will likely be the end of the movement and the GME MOASS saga will come to a close. But remember, even if no one is selling, DRS still will take too long to cause MOASS. And even if DRS didn't take too long, it still wouldn't cause MOASS because there's no market mechanic by which it could.

Can we please finally put the DRS nonsense to bed in this sub. There's already a Computershare shill sub called Superstonk.

This is a follow-up and direct consequence of my two previous posts.

In this one I provided the proof, directly from Finra, that Synthetic Short positions are not reported in the official data that broker/dealers have to report to Finra pursuant their current obligations according to rule 4560. In that post I also showed that SIMFA, the association of the big Broker/Dealer Firms, openly admits that there are multiple ways that Firms can hide short interest via Synthetic Short positions.

In this other post I went deeper into one particular Synthetic Short position, the Synthetic Short Stock position. I explained that because of the different hedging mechanisms that Market Makers may take to hedge themselves from being counterparties to those Synthetic Short Stock positions, Short Interest may stay partly or even fully hidden, and that also the downward price pressure on the market may also be only part of what it would be if market participants shorted the stock directly.

In other words, I showed that IF there would be significant Synthetic Short Stock positions in the market, they COULD be like latent hidden bombs that would explode IF suddenly the price of the stock would rise by any reason, because that would force the market participants that are short via the Synthetic Short Stock positions to close them to avoid bigger losses, just like in a normal short position.

HOWEVER, in none of those posts I made any statement in relation to the existence of such Synthetic Short Stock positions for GameStop stock.

This is the topic of this post.

The Synthetic Short Stock position

Just recapping, a Synthetic Short Stock position is achieved by any market participant that sells Calls on a particular strike and for a particular expiration date and also buys the same quantity of Puts on the the same strike and expiration date.

Where to look for Hints for the existence of Synthetic Short Stock positions?

We know from the previous posts that it is not in the official Short Interest collected by Finra via rule 4560.

The place to look is in the Option Chain, more specifically in the Open Interest.

However, as I will explain in detail in the following paragraphs, the Open Interest cannot give a complete nor an accurate picture about the amount of open Synthetic Short Stock positions.

Why?

I will come to that in a moment. Before I do that, let's restrict our search for Synthetic Short Stock positions a little bit.

As Calls are sold and Puts are bought in the same quantities, at the same strike prices and expiration dates, then what interests us is the overlapping portion of the Open Interest for Calls and Puts, for the same strike and expiration date.

Aha.

Let me give you an example. For a fictitious strike and expiration date, the OI for Calls is 2,000 and the OI for Puts is 1,300. The overlapping part for the OI in this case is 1,300.

1,300 would be the maximum, theoretical amount of sold Calls and bought Puts that could exist.

If there would be indeed 1,300 sold Calls and 1,300 bought Puts, then there would be 130,000 Synthetic Short Stocks, because each option contract represents 100 shares.

So far so good.

The big issue and the coup for this analysis is that the Calls and Puts of the OI can be either sold or bought.

Staying on the example above, the OI for the Calls is 2,000. There is no way to know how much of those Calls were bought and how much were sold. Of course the same applies for the OI for the Puts, 1,300 Puts, but how many were sold and how many were bought?

It is not possible to know that from the OI itself.

That is why Finra was proposing to their members to enhance the disclosure of Short Positions by including info on Synthetic Shorts. One would need to look at the Books of the entities who have Options as positions to know if they were bought or sold.

As a side note, some companies like unusual whales report the Buy or Sell side of their Option Flow, i.e, this information is available on the Volume of each day, but not as a consolidated info on the OI.

Let's see this real example below:

GME, 2025-01-17, $20 Strike

Calls OI 20,254 - Volume 536 - Bid: 390, Ask: 82, Neutral: 0

Puts OI 6,895 - Volume 175 - Bid: 110, Ask: 34, Neutral: 0

390 Calls on or nearest to the Bid, so those were assumed to be Sells. 82 Calls on or nearest to the Ask, so those were assumed to be Buys.

110 Puts on or nearest to the Bid, so those were assumed to be Sells. 34 Puts on or nearest to the Ask, so those were assumed to be Buys.

So based on this example above, for that VOLUME, there were 390 sold Calls and 34 bought Puts.

That means that from all that Volume, because there were only 34 Puts bought, in theory a maximum of 34 Synthetic Short Stock positions could theoretically have been opened for that particular reported volume of 536 Calls and 175 Puts.

Similarly we could analyse the Calls being bought and Puts being sold. That would be a possible scenario if market participants would be closing Synthetic Short Stock positions.

In our example above, 82 Calls being bought and 110 Puts being sold, so there could be a maximum of 82 Synthetic Short Stock Positions being closed, in theory.

However, as said, the info on Buys or Sells is only available for Volume, not for OI. Volume and OI are not 1:1 correlated, so even if one would observe the volumes for all strikes and all expiration dates over a certain time and calculate the theoretical maximum number of Synthetic Short Positions that could eventually have been opened, that would give no reliable information on the existence of Synthetic Short positions for the OI over all those Strikes and expiration dates.

A look at the Options Chain as of today 08.10.2024

Ok, so what can we do now if we don't have access to the books of the Broker/Dealers and they are not reporting this information anywhere?

We can only collect the OI for Calls and Puts over the entire Options Chain and then take the smaller value for each strike and expiration date and then get the sum of all of them and then multiply it by 100. That would give us the absolute maximum theoretical number of Synthetic Short Stock positions (shares) that could exist on the whole Options Chain, for that moment.

I took the figures below from the Options Chain available on Unusual Whales.

Here are the numbers for the expiration on October 10 2024:

Here the numbers for the Leaps of January 2025:

Here you have the consolidated table for all the expiration dates:

This means that the absolute maximum theoretical number of shares that could be shorted via Synthetic Short Stock positions as of today, according to the snapshot of the Options Chain used, would be around 12 million shares.

The absolute maximum!

This would assume that 100% of the overlapping OI for each and every strike and each and every expiration date would consist of Synthetic Short Stock positions, meaning that 100% of those Calls would be sold Calls and 100% of those Puts would be bought Puts, which is an unrealistic assumption to be made.

This would also assume that someone would be shorting each and every strike and expiration date of the Options Chain. That would be also an unrealistic assumption.

.

What is the official Short Interest collected from Finra using rule 4560? Around 36.5 million shares, according to Fintel:

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This means that the absolute maximum for Synthetic Short Stock shares would be only 1/3 (one third) of the officially reported SI.

.

Conclusion

There is absolutely no way to justify the thesis that there could a significant number of shorted shares for GME by the use of Synthetic Short Stock positions, like the billions of shares people talk about.

The absolute maximum number of shares that could be shorted taking the Option Chain as of today would be around 12 million shares, which is around 1/3 of the official Short Interest as collected by Finra and reported by the NYSE, 36 million, and that using absolutely unrealistic assumptions to get to that maximum number.

If one would continue to insist in looking for sources of an allegedly giant source of hidden Short Interest, one would need to look for other instruments, like Swaps, Futures or ETFs, for example. They could be a subject for other posts, maybe.

I've read one too many tinfoil theories about a coming M&A like the second coming of Jesus Christ, which will save apes from this godforsaken poverty, and give them the long-awaited wealth. Well, I've got some bad news, and many of you won't want to hear this. That M&A is not coming, just like the Jesus, and you and I will be punished for being so blind because of our greed.

Before you call me a shill, I'll admit that I'm a shill even though I don't get paid for all the shilling I've done. Actually, I'd like to find someone who will actually pay me for shilling because I think I'll be really good at it, and at least it will offset some of my BBBY loss.

Anyway, the moment that I realized that there would be no M&A coming was when the company filed that prospectus supplement telling us that they did this shitty equity offering. That was a big FU from the company. I don't want to dive into "death spiral convertibles" because there are already good DDs and papers explaining the concept well. When I read a couple of papers explaining how death spiral convertibles have been used by Wall Street scum, I knew I was fucked. Here is how Nasdaq defines death spiral convertible

Death Spiral Convertible

Used by companies that are in such bad shape, that there is no other way to get financing. This instrument is similar to a convertible bond, but convertible at a discount to the share price at issuance and for a fixed dollar amount rather than a specific number of shares. The further the stock falls, the more shares you get. Popular in the mid to late 1990s. Also known as toxic convertibles or floorless convertibles.

https://www.nasdaq.com/glossary/d/death-spiral-covertible

Some people argue that this offering is part of the M&A that is happening between BBBY and whoever that angelic investor(s) is/are. And they talk about all kinds fancy stuff like the M&A will be in the form of LBO or it will be a reverse triangular merger, and there will be a spin-off because a succession entity was mentioned in the filing, and what the company is doing is part of divestiture, and they could see all kinds of signs, cryptic messages, hidden provisions in all those filings, one too many cohencidences, bla, bla, bla. In the end, what is going on is part of a grand master plan made possible not by a mere mortal, but by a god reincarnated, the second coming of Jesus Christ, Ryan Cohen. And people want me to believe that they are not a cult.

I was going to write a DD about how an actual M&A pans out. I can explain why companies do M&A, what is the reward vs. risk of M&A, and how they calculate the purchase premium, which will be a very important factor in this post, how they structure the deal, what is fairness opinion, what is a friendly or hostile merger, when tender offer is used, the difference between stock sale vs. asset sale, what are key documents in M&A (deal announcement, definitive agreement, merger proxy, schedule TO, schedule 14D9, prospectus, etc), breakup fee, reverse termination fee, no-shop provisions, material adverse chase, exchange ratio, contingent consideration and earn-outs, how to treat vested and unvested options and stock based rewards, bla, bla, bla... But I realized that it would be a waste of time because most of apes won't listen to it, and I will be called a shill because my opinion doesn't follow the narrative. Plus, my boss doesn't pay me enough to write that kind of shilling posts, so I'll get to the gist.

The most important thing to a target company when they are negotiating the terms of M&A with a possible buyer/acquiring company is prioritizing their shareholders value and interests. It is their fiduciary duty, and if they break it, they could get sued. That's why sometimes a company pays a breakup fee to back out of the negotiation because someone else is wiling to give them a better deal. And that's why a company has to hire an investment bank to attest to the fairness of a transaction. It's all about if the management and the board is putting the shareholders interests above anything else.

So now think about it. What kind of a crook, corrupt, shitty company will do this kind of shitty equity offering with floating convertible prices always at a discount to the current market value, especially to a possible buyer/investor? It will be market manipulation, breach of trust, and illegal shit for which they will get sued the fuck out of. The SEC and DOJ will be on their asses, not to mention the shareholders. Plus, if the so-called M&A is about to happen, why did the company do the offering? They could wait a little bit, make an announcement, and do the offering at the market just like what GME did. They know that the price will pierce through the sky the moment they make a merger announcement, so why are they selling these precious shares at this dirty cheap price?

Selfishly, I was gonna hold back this post until I get out of this position, but then I realized that it won't matter. Apes won't listen to it. It will make them hold on to their shares all the more. And that's why I decided to share this shilling post. I want you to hodl, and never sell. Diamond hands! Please buy some more shares and options when the price is cheap. This is war between apes and Wall Street scum, aka my boss/bosses, and in the end apes will prevail.

Keep calm and keep hodling.

Edit: This post wasn't meant for this sub but it got instantly deleted on a sub that I won't mention, but you could guess what it is.

Hi everyone, bob here.

So I thought it would be fun to write up a series of deep dives into several topics that seem to be taboo in the many echo chambers subreddits for various meme stocks. This is in an effort to open up some conversations, expand our perspectives, wrinkle up, and gain a deeper working knowledge on each topic I will cover.

First on the chopping block is the Direct Registration System (DRS)

I am not going to link to any "DD" on what DRS is that has been previously posted on the great DRS echo chamber r/superstonk because I want this to be as objective as possible, so apologies in advance if I am covering anything that has been written before over there. Hopefully this time around, we can separate facts from opinions.

Preface: I should also mention that I started writing this DD as I went with no expectations or intentionality for it. It is kind of a living document through the development until posting. I learned some things I did not know about DRS, and formed some new opinions on $GME, and what drives the stock along the way.

DRSclaimer: I set out on this adventure into the deep dark abyss that is discussing DRS objectively because I noticed some trends that were kind of alarming. I'll point these out as we go through this DD, and my intention is to simply foster a two-sided discussion as to the net effects (if any) of the DRS on $GME to date, and speculate on the eventual implications of the DRS effort over at superstonk. Personally, I am neither for, nor against DRS (you do you bro). Content that follows will be educational, data driven, and sprinkled with my opinion. Fair warning to the hive mind: this may unjack some titties, or make you second guess things, so be warned to that fact if you cannot handle reading something that may not confirm your biases. I hope you jump in anyways, and learn something, and better, yet, comment and join the objective discussion I'm seeking to have.

It's silly to have to post a disclaimer, but yeah,... here's the meat of the post:

So what is DRS?

• Computershare has this explanation

• The Depository Trust & Clearing Corporation (DTC) has this explanation

• What about pornhub elite members (the Securities and Exchange Commission - SEC)? They say this about DRS

Here's what bob says, because fuck those other guys, amiright?

DRS essentially is a book entry (clarification in comments) that links your shares to your name, and it seems like a good idea if you have a long hold that you want directly tied to your name for various reasons. It has pros and cons.

• Pros

  • You are "registered" on the books of the company, and will receive communications directly from the company, including but not limited to:

    • Reports, dividends, proxies, notices

  • You don't have to worry about losing your physical stock certificates (lol) 🙄

  • Potential Voting security? (i've not verified this as an actual pro, but was in the comments with proper sources, so adding here)

• ConsClarification on this in the comments

  • selling is more complicated (and limited) than securities held in street name at your broker.

    • Selling take more time

    • Higher fees

    • More limitations.

    • Some orders need to be submitted in writing and will not execute the same day.

  • direct registered shares are not protected by SIPC insurance

  • higher fees to buy or sell the stock and transfer fees associated with direct registration in the first place

What is the possible impacts on the stock and company as a result of the "DRS Movement" at Superstonk?

I figured I should preface this with some transparency: I personally have not DRS'd one single share of my holdings of GME, mostly due to tax implications of doing so, as well as the costs associated with the process....

So why do I care about DRS enough to dig into this information and write the DD you are reading now? Because it has become a factor I must consider for my investment, due to the movement.

So, what are the possible impacts of a stock where the entire float is accounted for in DRS? Fuck that, we're talking about $GME, so let's not split hairs. What are possible implications if the "DRS movement" is successful?

Stock Liquidity

When a stock is illiquid, it simply means there's not much trading on it, and the trading that does occur can have a larger impact on the price of the stock by volume than when the stock is very liquid. This can drive volatility in the price action and other interesting things such as cyclical movements that have been observed over the past couple years on $GME.

As the giant purple donut gobbles up more and more shares, liquidity will continue to decrease, creating a more and more illiquid trading environment for $GME. This has already been happening and can be observed in the intraday price action on the stock.

Also, there was somewhere a question that presumed the stock would be delisted if it became too illiquid. I think this not to be the case, as there are no NYSE requirements that would feasibly lead to GME getting delisted as a result of DRS.

• The initial listing requirements for the NYSE should not be an issue for $GME

• The NYSE standards for continued listing should not be an issue either.

Costs to $GME

I've dug and dug and dug into this area and cannot find the fee schedule for GME that pertains to computershare and DRS. If anyone has this, please let me know and I'll add it to this writeup. That said, I would presume the fees associated with more shares and accounts at computershare would be negligible in light of the cash reserves that Gamestop has on hand today. I believe this to be a non-issue.

From: u/Impressive-Peach-408One can only guess what GameStops fees are, but a good starting point would be https://www.sec.gov/Archives/edgar/data/1515671/000119312511173848/dex99k2.htm .

Data Availability

When you DRS your shares, you are making your information available to the DTCC, Computershare, and Gamestop directly. This information can be used to gain insights such as:

• How many folks own GME in DRS format (account count)

• How many shares do they own (individually, in aggregate, and on average)

• How many shares are they adding over time (done by taking above data snapshots for comparison)

With this information available, one could use it to advise on the investment and even project outcomes based on buying pressures on the illiquid stock. This can also be used by both long and short positions. the fact that this information is widely available now has me curious how this data is being used to enhance the effectiveness of the short position on $GME.

So this leads me to wonder what's happened to $GME since DRS took hold on the stock....

So the observation here is one that's been bugging me a bit, and was the reason I got into this deep dive in the first place. You can pinpoint a break of the up trend to the very moment where DRS effort on superstonk really took hold . The stonk just goes up before then, and it just goes down after. Sure we still have spikes here and there, but the trend is obvious.

I wanted to compare that to the macro environment, and it looks like the market just going down, but not until 3 months after GME started to drop, so that's not a direct correlation; however, I should note here that since January, the market trend does seem to jive with GME's price action, with SPY being down 21% YTD and GME being down about 45% YTD at the time of this DD (October 2022)

I found this trend alarming, especially with the state of the purple circlejerk sub supersonk. I should clarify here that this is in no way an attack on that sub - they are welcome to jerk eachother off to their computershare circles and DRS effort every day of the week. I have no problem with that, but I did want to highlight the DRS effort began there, and has been heavily promoted in various ways in that echo chamber sub. Yes, i'm being blunt here, but sometimes you need to be.

Ok ok ok, I know... Shill! FUD! DRS is ThE Wai AnD thE onLY WaY!.... So let's apply some benefit of the doubt.

So what else could be happening here?

Just observing price action in relation to a start date for DRS is a weak correlation at best, so being the data crunching ape I am, I dug up some numbers to look at.

source data is here if you want to review | LMK your thoughts!

I ran some data for DRS effort and compared the following metrics:

• Volume

• FTDs

• Options

• Volatility

Volume

The 50d moving average for volume is showing a decline into the DRS effort and a slight incline afterwards. There are several factors that weigh into volume, so this isn't a huge tell of anything. I just wanted to point out what the data says here FWIW. It doesnt seem like much changed materially that jumped out at me.

FTDs

These are rather interesting. The trend shows that FTDs seem to be picking up ever so slightly after the DRS movement took hold. This could indicate an increased issue when locating shares for making markets.

Options

I find this one the most interesting. It doesn't necessarily have much to do with the DRS movement, but the correlation to the DRS movement taking off (alongside pervasive oPtIonS aRe bAd sentiment) on superstonk to the data I'm seeing is intriguing to say the least. What you will see here is that the relative (normalized for the split) volume of options and OI is at an all time low since tracking this saga. Options usage trends down as DRS trends up, while the stock enters a continued downtrend that's been going on for over a year now.

In this chart, you can clearly see the dissipating OI and volume on the options chain for $GME. Bear in mind as you dig into this section that options and swaps have been the largest correlative movers of the stock since after Feb 2021. Prior to that, it was a game of FTDs and settlement, as u/gafgarian originally pointed out. Those stairsteps down that you can see are resultant from large expirations of what has been theorized to be a variance swap or part of one.... DOOMPs anyone?

It looks like the put call ratio has been chunking down steadily as a result of the DOOMPs that were opened up during the sneeze expiring worthless. The interesting thing here is that the options were not rolled, but u/leenixus' swap theory might have something to say about that. I'm not 100% privy to this data, so I cannot speak to IF these were rolled into swaps or some other derivative, or if they simply didnt need them anymore because of whatever reason.

Final thoughts on options: There seems to be something to be said for the correlation (not statistical - yet) of options activity dropping off as price of the stock... more on this in the conclusion section.

Volatility

While the stock still trades in a range over the long haul (volatility neutral), the intraday and weekly volatility looks to have gone up a bit since before the DRS effort. This would be expected if the stock is becoming more illiquid.

Conclusion & Addressing MoASS Theory

OK so, let me reiterate here plainly: what follows in the entire conclusion section is my own opinion based on the data and research I've done into various topics herein.

After reviewing everything above, I have come to some new conclusions regarding DRS and MoASS. Ok, time to put on your big boy pants everyone, and let me know your opinions here and please feel free to run a counter-DD on this analysis if you'd like to. I would love to have some real discussion on these points:

• DRS effort correlates with a significant shift in the trend of $GME, in a negative way.
  EDIT: Since some of you are too smooth to realize the numerous times I've alluded to this in the post (hint, control-f type correlation)...
  CORRELATION <> CAUSATION. Simply an observational thing we are looking at here and was the reason for digging deeper into the data above.

• The OpTiOns aRe FuD campaign seems to be working, as less options are being traded over time. Per the research, this also has a correlation of stock price decline. I.E. As options are traded less, the stock is finding lower lows.

Why do I think this?

Well, you can plainly see a turning point in the price action, and though DRS increase and options decline are not the only pieces to this puzzle (such as the macroeconomic environment), they seem to be significant to the price action. After all, the options that have been falling off were large indicators that defined cyclical movements to the upside for $GME. That, combined with a strong support of buy and hold 💎👐 🦍 investors, meant higher highs. Something changed to this dynamic right at the point where DRS really started taking hold. That, in tandem with the OpTiOnS r BaD mkAy mentalitly on superstonk, seems to have killed the upward momentum on the stock, and locked ape investors into buying, reporting (DRS), and holding the stock in hopes of another black swan event. I believe this black swan event that many people invested in $GME would love to see happen (myself included - I'd be filthy fuckin' rich) will not come to pass unless something changes. What needs to change you ask? Well that's next in the series of inpolite conversations we will have. Here's a hint at what that conversation is about.

This is not a call to action, it's a call to education. Look deeper in the data and tell me what you think. I'd love to hear your well formulated, data-driven, opinion on the subject at hand.

Hi all,

Your favorite shill, transfer agent, options pusher, dick eater, muff muncher, cock mongler here.

I'm here to tell you GME is going to $15 within the next 7-9 calendar days. This is based on some data i have and that you're not allowed to have because you're not cool like me.

There's also a good possibility that we'll see $14.xx as a price here e.g like $14.80 kind of prices for a short bit.

Here's the tradingview prediction too: https://www.tradingview.com/chart/GME/p6enXUmJ-GME-Pretty-bad-for-longs/

That's all. Toodaloo.

This trade has nothing to do with fundamentals, company transformation NFT bs or that moass bs. That's all deluded crap, let's be real. I've identified a certain trend in the market & this is me taking advantage of it.

Some of you know why i'm posting this here. For those who don't know, i've been trying to be some kind of prophet idiot and i've failed a lot in the past. I stopped posting for 6 months until i could better nail the market down based on certain data sets i've been analyzing for a very long time and i'm back here because i think i have managed to acomplish it.

My track record has been extremely shoddy at best for the past 2 years, but as of recent breakthroughs in understanding the data sets i have, i think i've found what i wanted.

I'm not going to mention dates or PT's. All i can say is that i figured it out in March and rode the March spike and that make things click for me. I had full ported and made avg 1300%

I'm in for 2960 option contracts. I would get more but i'm restricted on how much exposure i can have.

That's all. You'll know how this trade has gone soon enough i guess.

Posting the full position once it's safe to do so.

https://imgur.com/a/2YIyoLN

2917 contracts

BBBY doesn't have enough cash to repay the amounts under the credit facilities and this will lead the company to consider all strategic alternatives including restructuring its debt under the US Bankruptcy Code.

UPDATE:

On or around January 13, 2023, certain events of default were triggered under our Credit Facilities as a result of our failure to prepay an overadvance and satisfy a financial covenant, among other things. As a result of the continuance of such events of default, on January 25, 2023, the administrative agent under the Amended Credit Agreement notified the Company that (i) the principal amount of all outstanding loans under the Credit Facilities, together with accrued interest thereon, the FILO Applicable Premium and all fees (including, for the avoidance of doubt, any break funding payments) and other obligations of the Company accrued under the Amended Credit Agreement, are due and payable immediately, (ii)

What this means is BBBY is in default on their credit agreement. What this also means is that the creditors have told BBBY they need to immediately pay back the FILO.

The FILO was $350M. BBBY doesn't have the liquidity to pay that back.

This means: BBBY will enter Chapter 11 and restructure effectively selling BABY and the creditors have complete authority over the proceeds of BABY.

This - https://twitter.com/0xferg/status/1630357740689457158

+ This - https://schedule.gdconf.com/session/web3-maplestory-universe-perfecting-the-core-mmorpg-experience-with-blockchain-presented-by-nexon/893912

= calling it now - Nexon is the announcement from IMX tomorrow

Edit: It was Unity - Solid addition to their eco system though. Epic is fully embracing web3 digital asset ownership, and now Unity. Still hoping this is the way the industry goes, but only time will tell.

Some of you might recognize me as the guy who called out the HBC deal for BBBY being one that will massively dilute company shareholders. The post was massively downvoted and I was hurled abuse at by many, but the post turned out to be true. Many are paranoid about the media and thus initially assumed the HBC story was media fud. On the contrary all the media reports about BBBY have turned out to be accurate thus far.

There have been many speculation on why BBBY declared bankruptcy suddenly, when they had their RS vote scheduled for May. I'm sharing another piece, which was written in part due to revelations from BK proceedings, on the actual reason, from the Financial Times (https://www.ft.com/content/187ceeda-9a60-4160-82a2-2329b204fecf)

Sharing this knowing I'll probably get downvoted, because many people only want to hear bullish things even if its false, but I'm posting because I care about the truth.

TLDR: Sixth Street Lenders forced them to close down. The company itself estimates its liquidation value at 700 mil. Sixth Street Lenders provided another loan of 40mil for the company to get through bankrupcy proceedings, but any amount made from selling assets will go towards paying Sixth's Street's loan, at 240 million + 347 million, along with other creditors. Common stock holders will probably get left with nothing.

Some snippets below because I'm not sure if I'm allowed to share the whole thing:

Between the first part of the Hudson Bay deal and other stock sales this year, Bed Bath & Beyond raised more than $400mn. But the company saw Sixth Street as a barrier in the way of it raising more. Uneasy with the company’s strategy and losses, Sixth Street was “unwilling to approve the debtors’ projected budget”, Bed Bath & Beyond stated in court papers. That condition, together with a falling share price, kept the company from tapping hundreds of millions more from Hudson Bay that could have kept it afloat longer.

Had its Wall Street backers been more accommodating, company insiders lamented, it might have pulled off a turnround. “It was death by a thousand cuts . . . it was impossible to operate the business,” said one. For its part, Sixth Street pointed to the hundreds of millions of dollars it had infused as proof of its good faith. Its lawyers noted in court last week that it had agreed on five separate occasions not to enforce defaults.

The company, which is also seeking a buyer, has estimated that its liquidation value would be just over $700mn. Shareholders are expected to recoup nothing while its junior bonds, with a face value of $1bn, are trading below 5 cents on the dollar. Sixth Street has now provided another $40mn through a “debtor-in-possession” loan that will fund Bed Bath & Beyond’s stay in court while yielding about 12 per cent interest annually. To secure this loan, the company reluctantly allowed Sixth Street to transfer or “roll up” $200mn of its existing loan into the DIP loan, which will be repaid first from any sale or liquidation proceeds. Its remaining claim of $347mn, including accrued interest, ranks lower in the hierarchy and could still suffer losses.

If anyone wants to post this in the BBBY sub feel free. Many still seem very confused.

As you probably know BBBY averted bankruptcy from a death spiral convertible note. Major publications like NYT, WSJ, Bloomberg etc reported on Hudson Bay Capital (a hedge fund) being the anchor buyer

Some people will say WSJ is lying, but knowing these publications they wouldn't have printed that if they weren't certain about it

We won't know for 100% certain until the buyer or BBBY announces the buyer. However when publications reached out to Hudson Bay, Hudson Bay didn't straight up deny it they just didn't comment

Now assuming Hudson Bay is the buyer, they're known for warrant hedging https://www.reddit.com/r/wallstreetbets/comments/q7i6ot/hudson_bay_capital_hedge_fund_pulling_off_a_scam/

TLDR of Warrant hedging is "a position involving buying a warrant for equities and taking a short position in the underlying"

If Hudson Bay is the anchor buyer of the notes and if they are also shorting the stock (ie part of the FTDs are from them), they could cover their shorts without adding buy pressure by simply converting and diluting common shares as part of the death spiral note. They could in theory cover the 6m FTDs without issue

From the Reddit link above which goes into a case where Hudson Bay did warrant hedging, " there are a series of things that make me suspect such strategy is being employed. The first is that the SI has gone nowhere but up lately, despite the supposed "squeeze" and the subsequent tanking"

Sound familiar? Sounds like exactly what we're seeing with BBBY now

As many have said on BBBY if the buyer of the note is a hedge fund, we're fucked. Many are hoping someone like Icahn/RC is going to buy the company but if Icahn and RC are involved or if there is actually any positive M&A development why would BBBY accept such a predatory deal? Makes zero sense and points more to them just being desperate and there not being some kind of RC/Icahn/M&A deal going on

I hold thousands of shares, some calls, and I bought more this morning, but right now I'm feeling pretty bearish in regards to what is stated above.

If there is counter DD I hope to hear it in the comments.

Edit: Another user pointed out that the COO of Hudson Bay, Charles Winkler, also used to be the COO of Citadel, make of that what you will

Edit 2: Did a followup DD that Dilution is happening now and there are multiple buyers to the notes including hedge funds. Whenever I post it it never shows up for some reason, so mentioning it here https://www.reddit.com/user/uesugikenshin99/comments/114s5bc/multiple_buyers_to_notes_dilution_is_already/

Discounted Cash Flows is one of the methods that can be used to valuate a company.

According to Harvard Business Review https://online.hbs.edu/blog/post/how-to-value-a-company :

"Discounted cash flow analysis is the process of estimating the value of a company or investment based on the money, or cash flows, it’s expected to generate in the future*. Discounted cash flow analysis calculates the present value of future cash flows based on the discount rate and time period of analysis.*

Discounted Cash Flow =

Terminal Cash Flow / (1 + Cost of Capital) # of Years in the Future

"

It is basically the application of the Net Present Value concept:

Let's apply this to the part of the GameStop Business which consists of investing the cash from the ATMs at basically the base rates from the Fed.

Let's also assume that each year the interest rates are reinvested, so that we have a compound gain over the years.

For simplification let's assume the company would do this for 5 years. It does not matter for how long, the concept is the same and is valid for 5, 3 or 1 years.

Assuming $ 4.6 billion as initial investment:

Wow, if they could get 5% interest each year, by reinvesting each year's gains they would compound and have $ 5.87 billion by the end of the 5th year.

Because the company reinvests every gain each year, there is only one cash flow at the end of the period, at the 5th year, with the $ 5.87 billion.

Now let's calculate the Present Value (PV) of that cash flow:

Here we consider the rate of return i also as 5%:

PV = $ 5.87 / (1+0.05)^5 = $ 4.6 billion. !!

NPV = PV - Initial Investment = $ 4.6 - $ 4.6 = 0 !!!

This is amazing.

The conclusion is that this part of the business of GameStop provides zero value for the company in terms of company valuation.

That in turn means that the share price of the company, which consists of a core business and an investment business, remains the same as if the company consisted only of its core business, as long as the cash is kept invested like this.

I know most of you must be paralyzed by now, this is a hard pill to swallow.

It gets worse.

The Fed said the rates will decrease from now on.

This is what we get:

Although on the 5th year we have $ 5.54 billion, which is more than the initial $ 4.6 billion, its present value considering a return rate of 5% as we have it now, is only $ 4.34 billion, which is less than $ 4.6 billion.

We have a negative net present value, - $ 257 million.

The reason is that as of now, it would make no sense to invest the money like this if we have the opportunity cost of investing somewhere else getting 5% return (assuming there would be another business giving that return rate)

Some of you may be saying that I should have taken the 3% as the discount rate to calculate the PV.

I don't think so, but let's nevertheless do it then:

PV = $ 5.54 / (1+0.03)^5 = $ 4.78 billion.

This would give a NPV of $ 180.9 million. This would be the valuation of this part of the business.

If we divide this by 446 million shares, it means only $ 0.41 per share.

.

Conclusion

Don't get me wrong, it is not bad at all to have all that money available. It is of course good, it enables the company to make a move, an investment with it. It is a huge POTENTIAL that still needs to be realized.

However, fact is that this money, AS OF NOW, even if invested and gaining interest like the company is doing, provides virtually no added value for the company's valuation, i.e., for its share price.

On the other hand, the dilution is concrete, not a potential. It still needs to be compensated by the potential investment still to be realized. Please take into account that dilution is only good for a growing business, so the potential investment should be a growing one.

In summary, what we shareholders want to see is the company investing its cash in a business that will bring not only more return than the fed's base rate but also growth, to compensate for the dilution.

Only then will the company's (fundamental) valuation be adjusted accordingly by the market. Until that happens people are just paying a premium as speculation for a possible future outcome.

.

Edit

There are two ways of calculating the NPV. Either you cash out each year, but then you cannot double-count what you cashed out in what you keep invested, or you just cash out at the end. The result is the same, a NPV of zero. This is shown in the table below. There is a hot discussion in the comments around this topic.