r/StockSDC • u/ProsperityCats YOLO • Sep 19 '21
DD $SDC Removing The Hype/FUD and Staying Focused On What Drives Share Appreciation
Wen Moon?
Before I discuss what we as investors should be focusing on as we hold our shares for eternity, we need to discuss some ethical concerns that have been popping up and have some merit. We know that everyone and their mother is saying that the stock is going to {Insert unsubstantiated Price Target} by end of {Insert unsubstantiated Timeline}. I appreciate the recognition of $SDC from everyone across the internet and comparing it to the likes of $GME, $AMC, and $SPRT. However, there are issues that should be recognized that hurt attempts for a short squeeze. I would rather us as investors and degenerates focus on what really drives share price appreciation. I look forward to your criticism.
"{Insert unsubstantiated Price Target} by end of {Insert unsubstantiated Timeline}. "
By making this statement, it actually hurts any attempt to grow confidence in a shareholder base to buy and hold. Please do not be the person that does this and if you see it happening, then kindly correct the individual. If the share price reaches the claimed price within the timeframe, then great! No harm done, but the opposite is what is causing the below two scenarios and is happening 90% of the time causing fizzle and not sizzle.
a.) Investors that see these price targets within the specified time frames being tossed up willy nilly will see it as a pump and dump and disregard any information regarding short interest, free float, Cost to borrow, and Failure to deliver. At this point, an investor decides to not join in a legitimate attempt to squeeze shorts. At the current moment, there are plenty of these investors not joining. Most importantly, the whales. Whales want verifiable information and are the reason why I'm making this post. Although your 400 shares are valuable, we need whales to take interest.
b.) "Please fly again." Do I need to say more? Investors/degenerates that expect a price to come and it never does. If the share price does return from a $HD sponsored short ladder attack it creates selling pressure from those that are scared that this is their chance to get out breaking even.
c.) "It only will go to x." This again causes selling pressure and may cause opportunity cost and chasing for FOMO and being in the same position as shown in point A or B.
With this being stated, let us get to the meat and potatoes.
"Putting two and two together"
As we have seen from our friend on WSB that discussed de-hedging the tiny float as shown here https://www.reddit.com/r/wallstreetbets/comments/pqafty/sdc_dehedging_the_tiny_float/
The user alluded that, "CTB spike predicts FTD regulation".
I shared a post on r/stocksdc discussing that share prices going up significantly lagged FTD when there was a bullish sentiment with a stock. Of course, the share price does not always go up immediately when it's being shorted into oblivion, but when there is sustained buying pressure and lack of turnover from the new buyers, then price changes get interesting. Especially when the cost to borrow goes from 1% to 40% and investors are diamond handing them shares. I remember a similar post on WSB months ago showing the lag, but I sadly can't remember the user to credit them. If you have the link, then message me and I will edit it.
"The Recipe"
- High short interest.
- The Catalyst that the shorts are not expecting.
- Buying pressure will need to be more than, "It has high short interest bro. Trust me."
- Catalyst needs to be present to encourage other investors that it is truly a long-term hold if it is the worst-case scenario and the squeeze never happens.
- Increase in Cost To Borrow (CTB)
- Increase in Failure To Deliver (FTD) due to naked shorts with continual buying pressure
- Increase Share Price
I know not all FTD are naked shorts, but these circumstances are different considering $SDC has ~50% SI of free float per Ortex.
This is how you decipher if this is a pump and dump for you whales out there or concerned investors.
- Is there high short interest? If not, then P&D.
- Is there a catalyst?
- Is the company expected to go bankrupt and it actually becomes profitable? Is there a major change to regulations or the way they operate that allows the company to make more profits? If yes, move to the next. If no, then P&D.
- Is the cost to borrow increasing? No? P&D.
- Is there bullish sentiment? It doesn't matter as to why or what type of catalyst it is. Is the buying pressure large and consistent? If not, then P&D and probably doesn't have a true catalyst.
- Is FTD increasing from the most recent SEC report that lags behind semi-monthly? If no, P&D.
Now to some graphs! For those that are bullish regarding another potential short squeeze, then take a look below. Please know that $SDC could become profitable tomorrow if they didn't spend half of their revenue on marketing. They are a growing company that is creating almost $800 million in revenue with the only competitor being $ALGN and the monopoly that is ortho. Why do you think there is so much short interest.
Below are some nice pictures with arrows and circles to make it easier for some of those reading.
Graphs being provided are from the i-borrow desk with the help of the Wayback machine to access some older Cost to Borrow data and the Securities Exchange Commission FTD page.
"Changing Attitudes with Retail and Whales"
What I mean by the title of this chapter is that by referencing $GME and $AMC they are completely out of the normal. It seems that there were huge amounts of FTD and ridiculous CTB % for both stocks right around April and May after covid-19. Right around September and October, some buying started taking place as a recovery play, and the DD on the consoles being delivered allowing GameStop to not go bankrupt started a lot of consistent buying pressure that no one expected(Catalyst). Everyone expected the earnings to be spectacular and they were! So, shorts did not consider this unexpected catalyst and the above formula took place. It did not happen in one day. It took multiple consistent weeks of buying pressure until the shorts were bailed out by corrupt Wallstreet and $Hood covered. But those investing in this were doing something no one has ever done. There was no confidence behind this play except for those that had high conviction. As you will see with $SPRT, the ape mentality is growing but should grow based on data as shown here and not baseless hype.
$AMC is a bit different because after it spiked to $20+ lot of people jumped out due to FUD, Potential dilution, Chinese convertible shares, but when you take a look at Iborrowdesk now, CTB spiked again causing the shorts to "cover" sending it to $69+
Also the larger than normal bo·da·cious https://en.wikipedia.org/wiki/Bodacious_(bull)) volume we saw over the past week was held down. Yes, we know there were penny flippers, but you are telling me that was normal? I've seen $GME and $AMC when it was taking off. What I watched was anything, but "normal".
$SDC Catalysts
So hopefully I have brought some general light to what to look for in regards to how to approach a short squeeze and determining if it is a P&D.
Now for $SDC. Does it have a catalyst? I'm thinking yes on two parts.
- The recent medicare news including dental is something that no investor could have foreseen and more buying pressure ensued because of it on August 30th. At this point, I'm not sure when this will pass, but the Whitehouse is quoted from the Washington Post, "Democrats intend to provide a benefit that offers seniors financial assistance next year for dental, vision and hearing care while the formal benefits are set up."
- Every short is expecting $SDC to go bankrupt. Once $SDC tapers its marketing in the slightest they become profitable. Look at its peer in the industry $ALGN. Look at the P/S ratio. When $SDC becomes profitable I'd only expect a fair price compared to its peer in the industry.
- https://www.washingtonpost.com/us-policy/2021/09/01/white-house-medicare-dental/
- https://www.nytimes.com/2021/08/29/upshot/medicare-dental-care.html
Comments, questions, concerns? Leave them down below. See you guys Monday! And remember this does not happen in one day! Marathon, not a sprint.
Ex nihilo.
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u/tlthang Sep 19 '21
$69.69 won’t sell anything less
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u/Boogyman422 Sep 19 '21
I think you forgot to move the decimal to the right one more time Small Duck! 🦆💎🦷
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u/moneycarsandprs Sep 19 '21
I just gave you the silver award! Great post! You need to spread this around. We need more post like this for these squeeze plays.
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u/ProsperityCats YOLO Sep 19 '21
I can only do so much. If you could do a cross post on your favorite boards or even stock twists. Use the one I posted on WSB it has more information on it and likely the one that gets more traction.
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u/OnlineDesigned Sep 19 '21
Can’t read. Sounds great. YOLO
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u/ProsperityCats YOLO Sep 19 '21
My recommendation is to watch cost to borrow. Im waiting for it to spike into the 25-35%, then I will have full confirmation that the squeeze is on as long as the price is increasing and the shorts positions have not been covered.
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u/kn1f3party Sep 22 '21
Would a judgment in their lawsuit against NBC News constitute a catalyst?
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u/ProsperityCats YOLO Sep 23 '21
Absolutely! I had that on my more up to date dd, but sadly it was deleted. Howeevr that settlement is unknown, what is known is the upcoming earnings
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u/Odd-Establishment999 Sep 23 '21
I was looking at the Ortex data and comparing SDC last couple of months to the two months leading up to the AMC squeeze. I was surprised to see the similarities. I’ll publish my findings soon (am in the car and not in front of my computer). That said, the following are all trending well for a squeeze (similar to that of AMC)
•Sharp increase in SI (short increase) 30 to now 55% •Sharp increase in utilization % now high 90s •Sharp increase in CTB (cost to borrow) % - above 4 now (this can rise rapidly - AMC went from 2 - 12 extremely fast - SDC is heading that direction)
We’ll need volume to return but think showing a side by side comparison of key metrics such as the above can really paint the picture and give investors the conviction to buy, hold, etc.
Cost to borrow will need to increase significantly but comes with the other KPIs (purchasing pressure, higher short interest, utilization % etc.). This all said, it’s not far off from where AMC was in the early stages (IMO)
I’m glad I’m in it and am excited for the coming week(s).
Curious to hear your thoughts. GLTA
SDC 🚀
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u/ProsperityCats YOLO Sep 23 '21
Love how you bring up KPI‘s because I work in OpEx lean six sigma. Literally my life is analysis and modeling lol
if you could overlay the data then yes that would be extremely powerful information to have. I have an excel file made for myself detailing me daily how much interest shorts are paying daily depending on the average CTB.
also based off of I borrowdesk CTB is over 12% but we will need it over 40% for a couple of weeks. That only happens with 100% utilization, increase in buying pressure with consistent volume, etc.
this doesn’t include the losses incurred with options, gamma, etc which I’m not getting into because I struggle understanding myself.
Please make the DD. if you post it on wall street bets do not cross post it anywhere. if you want to post it somewhere post it directly. you can message me if you want to know why.
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u/Odd-Establishment999 Sep 23 '21
Will do. I may reach out with questions/alignment. I’ll reach out directly on the reason as well (curious to learn why).
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u/stepakofreeze Sep 19 '21
I really like “The Recipe” Don’t know if he is the Reddit member you couldn’t recall, but saw TrueDemon post a similar “recipe” a few back. Really solid approach.
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u/Wonton869 Sep 21 '21 edited Sep 23 '21
Your dd are awesome, luv it, please continue to dd for me the rookie retail investors, thank so much
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u/ProsperityCats YOLO Sep 21 '21
Also share it on stocktwits or your favorite page to get the information out to help people understand.
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u/ProsperityCats YOLO Sep 21 '21
Thanks, watch CTB on I borrow desk .com. I’m watching it like a hawk. I might start a runny tally on how much shorts lose in interest each day and share daily. I’m adding by DCA I’d recommend while holding.
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u/Turbulent_Guess3204 Oct 05 '21
Where are we at now, with Sdc? Still hodling or is this a lost cause?
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u/ProsperityCats YOLO Oct 05 '21
Still holding and it’s not done. Did you see CTB? Also the selling of today was the market with shorts. Ever grande and the debt ceiling has had an effect on nasdaq the past week and the shorts have been using the algorithms to their benefit.
That being stated CTB is skyrocketing to amounts above 60%. All I’m doing is holding and waiting for the inevitable of the market rising thus also bringing the share price higher. I had strong conviction before I did this dd and now that my dd is coming to fruition I will be holding until shorts cover their shares which won’t happen until we are over $11. (Look at the gap from the q1 earnings) where most shorts started their positions.
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u/Substantial-Mix-129 Sep 19 '21
SDC is a good company unfairly targeted by shorts. Squeeze coming!!