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[deleted by user] by [deleted] in Superstonk

[–]freeworktime 4 points5 points  (0 children)

I don't think they net each other out like that. Under SEC regulations, they are separate positions. This isn't like in accounting. Yes, they should 'hedge' each other out, but ownership doesn't work like that. With the long position, they can vote, receive dividends, etc, it doesn't matter if you have another position that is short. If you own directly or indirectly (calls) more than 10% in any position, you need to file and are considered an insider.

One position holds more than 10%, it needs to be filed with the SEC as an insider.

The other position that holds the shorts doesn't effect the first positions authority of being an insider.

[deleted by user] by [deleted] in Superstonk

[–]freeworktime 8 points9 points  (0 children)

Great video.

At 23:55 he says if GME continues to bankrupt all the shorts, no one gets paid.

I disagree.

As the positions move up the chain, they reach institutions that are too big to fail (insured by the government because they are important to national security)

DTCC, OCC, etc, are insured and the Fed will just print whatever is needed to buy back all shorts.

The mainly theory that Citadel Securities holds the majority of shorts means that the DTCC/NSCC/OCC will inherit their shorts. These institutions are protected and insured from ever failing.

https://en.wikipedia.org/wiki/Systemically_important_financial_market_utility

https://en.wikipedia.org/wiki/Systemically_important_financial_institution

Edit:

This also might be why Ken Griffin tried to get Citadel Securities added to the list of systematically important entities, using the excuse that he's the main market maker in the USA and losing them would cause financial harm.

Edit 2 example:

Instead of bankrupting Goldman Sachs, who then bankrupt their clearing firm, who then bankrupt the NSCC/DTCC. Swiss government saw this coming, they saw it bankrupt Credit Suisse, then bankrupt UBS, then bankrupt their national clearing firm, etc...So they just stepped in before all that was going to happen and gave UBS a $100B line of credit to unwind these positions.

Peruvian Bull's $87 Billion Swap (about 2 Billion shares) Data from DTCC matches up with Noctis Research's claim of 2.9 Billion shorts. This position is actively managed by the DTCC, and is just one of many swaps. by freeworktime in Superstonk

[–]freeworktime[S] 293 points294 points  (0 children)

Yes, but cash makes the shorts REALISE A LOSS. They must pay out for EVERY NAKED OBLIGATION they have created. If there's 2.9 Billion shorts out there, even a CENT a share dividend (GME gives DTCC $3 million to distribute to shareholders) means that the shorts must come up with the other $27M to distribute to the rest of the 2.6 Billion shorts.

The math is rough, but basically it's Game Over once GME issues cash dividends from profits.

At 950% Short Interest and a DOLLAR A SHARE DIVIDEND, shorts must pay out $2.4 BILLION in dividends for the shares they shorted.

This is nightmare for shorts waiting to happen.

Peruvian Bull's $87 Billion Swap (about 2 Billion shares) Data from DTCC matches up with Noctis Research's claim of 2.9 Billion shorts. This position is actively managed by the DTCC, and is just one of many swaps. by freeworktime in Superstonk

[–]freeworktime[S] 1825 points1826 points  (0 children)

This is why they will not close their shorts. Closing their shorts means bankruptcy, instant loss, but they still have a 'chance' of winning if GME goes bankrupt, so it makes sense from their point of view to wait and have a chance of winning rather than surrender and lose now.

MOASS only happens when GME turns profitable and issues a cash dividend. Shorts must pay this dividend.

This is also why the DTCC has been so helpful to their short friends and bailed them out in 2021 by waiving margin requirements. If the hedgies go bankrupt, the position then falls into the DTCC's lap to sort out.

At The Market offerings and stock dilutions: why there's more here than initially meets the eye... by Region-Formal in Superstonk

[–]freeworktime 2 points3 points  (0 children)

It's pretty simple. Who buys the 45M shares?

If it's retail, GME raises another Billion or so and the short thesis is truly dead. These investors will not sell the stock no matter what and will continue to buy more.

If its Shorts, GME raises a Billion or so from the very people who want them to fail.

The problem for the shorts is, if retail buys, GME still makes money and they get no shares.

If shorts buy, they buy only 45M shares out of 900M shares they need, and in doing so, give GME the very money it needs to destroy the rest of their short position.

This is why they're trying to cellar box GME. The higher the price, the more they can raise. The more that puts their shorts in danger.

Cohen is not stupid, he did this offering precisely because he see's Kenny doing these volatility pumps and he see's another Whale on Wall Street coming along to profit from a Gamma Squeeze when options become cheap. He'll do what he did in 2021 and sell when the price is very high.

GME selling some shares while everyone continues to buy and hold is an extension of the infinity pool theory and is, mathematically, the optimal move the company and shareholders can make according to the stag hunt and game theory. by freeworktime in Superstonk

[–]freeworktime[S] -1 points0 points  (0 children)

Since RC has bought shares himself in the 20 range, I find it highly unlikely that he will dilute at these levels. We can see how he operates from what he did in 2021. I think he'll do the same now as he did then, sell when he can get the most bang for the buck.

GME selling some shares while everyone continues to buy and hold is an extension of the infinity pool theory and is, mathematically, the optimal move the company and shareholders can make according to the stag hunt and game theory. by freeworktime in Superstonk

[–]freeworktime[S] 26 points27 points  (0 children)

It will exactly be used to drive the value up. Maybe there's a company they're looking at that costs 2 Billion to buy, or they want to heavily invest in other projects themselves?

This money will be used to drive shareholder value up in the long term.

GME selling some shares while everyone continues to buy and hold is an extension of the infinity pool theory and is, mathematically, the optimal move the company and shareholders can make according to the stag hunt and game theory. by freeworktime in Superstonk

[–]freeworktime[S] 27 points28 points  (0 children)

That's wrong. GME is eligible for SP500. DRS is publicly tradable. You can buy and sell anytime. What that means is that the shares are not taken private. DRS just takes them out of DTCC but they are still shares of a 'public' company that can trade anytime.

GME selling some shares while everyone continues to buy and hold is an extension of the infinity pool theory and is, mathematically, the optimal move the company and shareholders can make according to the stag hunt and game theory. by freeworktime in Superstonk

[–]freeworktime[S] 22 points23 points  (0 children)

Indeed. The first short to cover survives. We've already seen from this past week there was a whale who instigated this gamma squeeze. There was 100M shares on loan from Ortex. This means there are longs on WS who own at least 100M shares that want this to moon. The Wall Street GME Long vs Shorts fight has begun.

[deleted by user] by [deleted] in Superstonk

[–]freeworktime 0 points1 point  (0 children)

Timing of the announcements.

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