There are still many retail investors who think the saga is far from over, and are now betting on direct registration (DRS) of their GME shares with the goal of triggering another, much bigger short squeeze than last year.
Its easily dismissed as conspiracy but having read many of their supporting arguments and seeing the SI (Short Interest) being over 220% myself along with the SEC report suggesting that shorts never closed their position... I can't say I would dismiss the possibility of another short squeeze...
"In seeking to answer this question, staff observed that during some discrete periods, GME had sharp price increases concurrently with known major short sellers covering their short positions after incurring significant losses. During these times, short sellers covering their positions likely contributed to increases in GME’s price. For example, staff observed that particularly during the earlier rise from January 22 to 27 the price of GME rose as the short interest decreased. Staff also observed discrete periods of sharp price increases during which accounts held by firms known to the staff to be covering short interest in GME were actively buying large volumes of GME shares, in some cases accounting for very significant portions of the net buying pressure during a period. Figure 6 shows that buy volume in GME, including buy volume from participants identified as having large short positions, increased significantly beginning around January 22 and remained high for several days, corresponding to the beginning of the most dramatic phase of the run-up in GME’s price."
Meaning shorts covering causing a small increase in price and then retail FOMOd in.
See also the graph on the next page that show short interest dropping from over 100% to around 20%.
I'd like to add to this the following scenario for explaining why short interest can be high even if the original shorters have closed their positions.
1. Lots of people are short.
2. Price goes up significantly, shorters get margin calls.
3. Price goes up a lot due to buying pressure from shorters closing their positions. (ie, the squeeze itself)
4. Price is now extremely high and fairly disconnected from fundamentals.
5. People notice the price is very high compared to earnings and open new short positions.
After step 5, there can be a ton of shorters in the stock yet there is not a very big chance of a new squeeze since the price at which the new short positions were opened is so high. Imagine how much the price of GME would need to rise to squeeze out the shorters who opened their position in the 300-400 USD price range.
FINRA and the SEC require brokers to report short interest data twice a month [1]. These are share aggregates. FINRA then provides those data for U.S.-listed companies to the exchanges, who publish it. None of those exchanges have changed their publishing methodologies in years.
> Now; SI = [Number of Share Short] + [Float] / [Float]
So you're saying that SI is always reported as higher than 100% now?
Since that's not the cause, are you saying there's negative number of short shares now?
I made a little money of it last year when the squeeze squoze, and I don't see it happening again.
I was late to get in, but not too late; the next morning, the price had doubled, so I sold half. I held on to the rest just to be along for the ride, but I think that morning was the real squeeze. I think I bought some extra on a dip, sold half of that for double again, and sold the rest on a minor bump a few months later.
Hectic stock like this can be an easy way to make a quick profit as long as you remember to buy the dips and sell at any bump that comes along. I bet that's what the big guys on Wallstreet did to make way bigger profits than I'll ever be able to.
Of course. Always check if something changed about the company itself.
And when trading derivatives, even dips caused by the market (rather than fundamentals), can lose you lots of real money. Because even if it will eventually recover, it might dip deeper and longer than you can afford. I lost a ton of money on Tesla that way. (I would have been rich now if I'd been able to keep that.)
Both Gamestop and Tesla were just the market freaking out. The market often does that. Much of the stock market is more about what other investors will do than what the companies themselves will do. It's a bunch of noise on top of the actual value of the companies themselves.
Of course sometimes it is the companies themselves, and then you need to pay attention. And because you rarely know in advance whether a dip is the company or the market, you always need to pay attention. But the Gamestop thing was a clear case of the market freaking out.
Right. So, you were taking a risk trying to buy in the dips and sell in the bumps, you were not following your own advice to "Always check if something changed about the company itself." Which is fine, it worked out for you.
Of course, the bigger picture challenge is that -- modulo market freakouts -- everyone else is also "checking if something changed about the company itself", and that's already built into the market price, that's kind of the model of how the market works. To make money by buying in dips only after checking if something is changed in the company itself, you have to think you are better at noticing or predicting changes in the company itself than everyone else, I guess?
That doesn't mean that $4 was what it should be, though. I hope GME used the ridiculously high stock price to issue a bunch of new shares, so they have plenty of money to invest in whatever they want.
> There are still many retail investors who think the saga is far from over
I had the misfortune to encounter one of these on reddit the other week. I asked (what I thought was) a fairly simple question - are people still in it because they think the company has a reasonable chance of turning around and making good money, or is this now an idealogical thing about sticking it to the man, or a bit of both?
And I basically got a full-on hard sell as a response, massive amounts of details about business plans and any reservations I expressed were due to me being stupid and/or biased.
It does seem like a good idea on paper, though when you look at the reports of how many people have actually DRSed their shares it becomes painfully obvious that it's so few that it isn't likely to ever make a difference.
What reports have you seen that show the actual numbers? Genuinely curious.
As far as I know, there is only one report that has been released--that was by Gamestop itself for the 3rd Quarter (Aug 1-Oct 30). That number was 5.2 Million.
Now, the DRS movement, for lack of a better term, did not start to take off until late August/Early September. IOW, DRSing shares has not been going on since last January.
The next quarterly results (Nov-Jan) will be released around the end of March and, assuming that Gamestop continues to release the DRS numbers, will provide 2 data points.
The last point I would like to make is that the total number of shares outstanding for Gamestop is only 76.5 Million. 12 Million of those shares are Insider shares. Even if you Ignore institutional holdings and individual investor shares held in brokerage accounts, 5.2 Million is 8% of 64.5 Million. I would say that is not an insignificant percentage, even if the DRS movement stagnated after October.
From what I've seen there are now ~122,000 accounts for DRSed shares, and even if the average numbers we're seeing on reddit hold for all accounts (which I doubt), that's still only around ~18M shares, or 28% using your numbers. That's a lot, but it only matters when it reaches 100%.
I don't want to spread negativity, I have a bit of money invested as well on the off chance that the theories are true, but I'm placing my bets that if anything happens it'll be because of stricter regulations regarding short selling, not because of DRS.
Just to clarify my original statement, I did not mean to imply that after the 4th quarter results come in, that another squeeze will immediately happen.
I've always thought that this would take some time (i.e. DRSing the float). I don't think it necessarily has to reach 100% (although that would fantastic) I do think the higher the number climbs, the harder it will be for investors and regulators to ignore.
DRSing shares will reveal irrefutable, easy-to-digest proof that there is illegal naked shorting of Gamestop. How that plays out (squeeze, investigation etc) is anybodies guess because this exact situation has never happened previously. (individual retail investors directly registering shares in their name to secure the entire inventory of a company).
>I've always thought that this would take some time (i.e. DRSing the float).
Is there any expectation that the number of DRSed shares will continue to climb, rather than asymptotically approach some arbitrary number? At this point you'd think everyone who wanted to DRS their shares already did it, so for that number to increase you either have to target stragglers (not many of them), or buy more shares (I doubt folks on superstonk have enough free cashflow to pull that off).
>I do think the higher the number climbs, the harder it will be for investors and regulators to ignore.
>DRSing shares will reveal irrefutable, easy-to-digest proof that there is illegal naked shorting of Gamestop.
Like, illegal naked shorting that's happening right now? I saw in other comments that the short interest is 20% or 14%. It's pretty obvious that you don't need to do naked short selling to get that kind of short interest. Not to mention, > 100% short interest isn't indicative of naked short selling either, because the same share can be lent over and over again.
March 22nd is when Gamestop 4th quarter results are released. They should also release the number of DRS'd shares.
But to be completely Honest: I will be able to answer your question with more certainty in about 12 months.
That will give us 5 data points. That should be enough to get an approximate number of shares being DRS'd every 3 months.
Through all of the due diligence and personal research, I do believe Illegal naked shorting is taking place. I'm not here to convince anyone to buy GME, but the DRS number seems simple enough for the general public (short attention span--I include myself in that) to wrap their heads around. DRS is the elevator speech, so to speak, for me.
If someone were inclined to listen to me, I can do a quick 2 minute, back of the napkin calculation that may spark interest, using DRS.
>“Some commentators have asked how short interest can get as high as it did in GameStop. Short interest can exceed 100%—as it did with GME—when the same shares are lent multiple times by successive purchasers. If someone purchases a stock from a short seller and subsequently lends the stock out again, it will appear as if the stock was sold short twice for the purpose of the short interest calculation.”