An UPDATED breakdown of the GME squeeze situation: Things to look forward to

Reading Time: 7 minutes

For those who are trying to piece things together, and get a broad overview of the whole GME situation, I have put this post together to highlight important events that have taken place recently, as well as to point out some things to potentially look forward to. Others have done the real DD, and this is simply an attempt to organize the important points so that new apes can quickly understand what is happening.

(Quite a few people asked me to update / post this every so often, so here is the updated version. I have put asterisks* on new or updated items)

I am not a financial advisor, none of this is financial advice, and I encourage you to do your own research on all of these topics / any trade that you decide to make. I am simply presenting information that I have found elsewhere.

Throughout the post you will see me say multiple times, “People are saying…” or “We have seen…”. When I say this, I am not talking about what people on the street are saying, I am talking about good solid DD that you can read about each of these topics. (Sorry for not linking to other relevant DD, but you’ll find them if you are interested in digging deeper. This post is meant to be clean and concise, and not cluttered with links everywhere.)

Here are the important things to know / look into further.GameStop company value increasing

• 175% Increase in online sales in quarter 4, compared to previous year. These online sales accounted for 34% of their net sales, as compared to 12% in the previous year, meaning that the online sales “pie slice”, almost tripled
• 11% Increase in sales for January, as compared to previous year
• Ryan Cohen announced as new chairman of GameStop (He will become the chairman after the company’s annual shareholder meeting, which is scheduled for June 9). Ryan Cohen not only knows how to make an online business thrive / explode, but he is young and knows what gamers like, which means that he will soon transform GameStop into, “The Amazon of Gaming”
• Don’t forget that lots of people like disc-based games too. Personally, every other store in my town that sells disc-based games is far inferior to GameStop
• New board members from HUGE companies (Google, Amazon, Chewy, Facebook, and more)
• GameStop now sells computers / computer parts, game chairs, TVs and other electronics, and more
• GameStop payed off $216.4 million in debt. In addition to this showing a solid financial situation for the company, this gives GameStop the ability to give dividends (See below for significance of dividends)
• GameStop gained $551 million by selling shares, to speed up their e-commerce transformation
• GameStop expanded their fulfillment network by leasing a new 700,000 square foot fulfillment center
• *Gamestop has something potentially ground-breaking going on at nft.gamestop website. People believe they are setting up something like a crypto dividend, or the ability to resell digital games, or a number of other things that can apparently / potentially be done with a nft / Non-fungible token. People are saying that this can be revolutionary, and can even possibly enable GameStop to be the new Steam of gaming. (Also, on the nft website there is a tiny white dot you can click to play a game where you are a cat in a banana suit in space. So bullish.)
• *There is speculation of a possible merger taking place, either between GameStop and RC Ventures, or possibly GameStop and SLGG… or some other huge merger / partnership. Not only can something like this serve as a catalyst related to people seeing the future value of the company… but I read that if a merger takes place and the company changes their name in the process, that a new ticker symbol / new CUSIP # is issued, and a share recall would need to take place so that new shares could be issued
• *GameStop is now getting involved in Esports, and opening performance centers for tournaments, where you can spectate or play
• *Gamestop is revamping their locations, from the interior, to the new sign with “.com” added, to the improvement in customer service
• *GameStop now offers same day shipping

Possible catalysts

• *We are awaiting the GME shareholder vote count. We hope / expect to see many more votes than the number of shares that are supposed to exist, which will prove that hedge funds have been manipulating the stock, likely causing lots more people to buy into GME. People previously thought that an overvote could cause a share recall / audit, and although this appears to be untrue, an overvote can still potentially be a trigger for the squeeze. Having this issue out in the open would put a lot of pressure on financial regulators to stop hiding the issue and to actually do something about the naked shorting
• *New SEC rules being put into are in place. These are rules that can make hedge funds finally pay what they owe (i.e. Buy back shares / start the squeeze). There are a few more rules still pending, but the big rules that are required for the squeeze, are in place
• Time itself: As the price continues to rise / refuses to fall, and as hedge funds pay more interest + spend more and more to short the stock, they become more and more overleveraged, and closer to getting margin called regardless of big catalysts. At some point the people who lent to hedge funds are going to want their shares / money back, pure and simple. You can’t just keep taking out infinite loans without extra collateral forever
• *We are awaiting the announcement of the new CEO, and some speculate that Ryan Cohen himself may step into the position, although the announcement of any brilliant CEO may also serve as a catalyst. This would be the cherry on top of their already amazing team
• *GameStop now has the ability to issue dividends, which gives the potential to put pressure on hedge funds, and cause them to buy back their shares / can trigger a share recall. If a dividend is issued, the hedge funds must pay the dividends for their shorted stocks, which they would not be able to handle. If a crypto dividend is issued, this may make it even harder for hedge funds to attain the currency and then pay it out to share holders

Big News

• On the first day that GameStop was able to see the vote count, GameStop tweeted a picture of an astronaut drinking a beer on the moon, and replied to people with many bullish comments… then the next day GameStop advertised “Mass Effect” and replied with a comment that has now been deleted: *moass* effect. That’s right, they tweeted about the mother of all short squeezes!
• *RC continues to tweet cryptic things that are very bullish no matter how you decode them. His newest tweet of a tombstone saying “R.I.P. Ryan Cohen, Dumb Ass” has people thinking that this could signify a merger, or possibly RC taking the CEO position. The more popular theory is that the tombstone represents a common financial term “tombstone” which indicates a merger / advertisement of a public offering
• GameStop acknowledged the possibility of a short squeeze in their earnings report
• Fidelity shows that 5 times as many people are buying GME, as those who are selling

Shills / insight into the other side

I believe it helps to get insight into what the other side is doing, as it makes me realize how real the situation is.

• We have seen many apes claiming (and providing proof) that they were contacted by people who tried to get them to post negativity about the stock
• We have seen overwhelming amounts of articles that say to “Forget GameStop”, and lots of other articles that appear to be desperately trying to get people to sell or buy into other stocks
• We see articles that make incredibly good news look like bad news, or otherwise we do not see the good news written about at all
• We see blatant price drops / short attacks right after very good news
• We have seen a video of Jim Cramer in 2006 bragging about the same dirty tactics that the hedge funds are using now to drive (manipulate) the price down, where he was literally saying that he encourages others to use the same techniques
• *When GameStop goes down a couple percent, the internet is flooded with articles of the “dip”, but when it goes up 10% + there is silence in the media. Robinhood and news outlets will not even list GameStop in their top gainers list when it is one of the top gainers

But what if someone stops the squeeze?

Nobody knows what will happen, but I have heard two supporting statements in reply to this question that I want to mention here.

• People have mentioned that the government stands to gain trillions of dollars in capital gains tax, not to mention the benefit of trillions of dollars being given back to the people / pumped into the economy. *Furthermore, the government knows that average joes / apes pay their taxes in full, unlike hedge funds
• People have mentioned how at this point, when so many people have purchased GameStop including large institutions as well as international investors… doing something to stop the squeeze instead of letting the market operate as it should, would cause widespread distrust for the American market, not just for retail traders but for big financial institutions too
• In addition, some people are saying that the SEC, DTCC, etc. are actively preparing for the squeeze to happen, and rather than planning to stop it, are putting have put things in place to keep innocent people safe from the fallout

A global event: We are not alone

• There are billboards and traffic signs that support holding GameStop stock, which shows how big this thing really is
• There are huge institutions involved on the long side (Such as BlackRock). Don’t feel like retail is alone on this one. Some big guys have skin in the game / want the squeeze too
• DFV exercised his options, AND bought 50k more shares at market price, and now he holds 200k shares
• Ryan Cohen also owns 9 million + shares
• It is believed that institutional ownership of GME is 100% or more of the float (FINRA previously reported 200%)
• It is believed that retail traders own 100% or more of the float (Actually it is believed that Superstonk alone owns the float)

*Long term value / Market cap for ecommerce

I and many others feel great about our investment in GameStop not just because of the impending squeeze, but also because of the overall value of the company, considering it’s recent transformation, and the even bigger transformation to come.

When viewing GameStop as an ecommerce company (which it now is), the market cap of the stock is actually quite low. The market cap would still be low for GameStop, at its highest price ever of $480. Chewy’s (A pet supply company) current market cap is 30 billion , and Gamestop’s (The Amazon of Gaming) market cap is 15 billion at $220 / share. Those are rookie numbers for GameStop’s true value.All shorts must cover

When it comes down to it, since GameStop will not go bankrupt, all shorts must cover, and hedge funds have not done so yet.

Hedge funds have shorted WAY more shares than are available in the float, which kicks the can down the road, but digs the hole deeper.

??????????????????