In advance: I am not a shill, not a bought account, and not sharing this to spread FUD. I’m Just some loser in NZ with a measly 30 GME Stonks to his name ( 💎👐🚀🚀🚀🍌🦍 ) and a want that my fellow apes not plan around grossly wrong historical data.
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So yesterday we had a highly upvoted post about preparing for the squeeze, and that linked to a separate DD from 10 days prior on building an exit strategy with examples using the price action for $DRYS when it had a short squeeze in 2016. I’m not going to link to either because I’m not wanting to direct hate at anyone.
Here’s the thing, though. That DD featuring $DRYS – while having genuinely helpful information I myself, as a double plus unsmart 🦍, did not know – is discussing how the price reached a peak of 800K per share, as below:
This is not true. As far as I’m aware no stock has ever reached 800K under any conditions, and if GME does it will be the first. After seeing the above price chart for $DRYS I ended up doing a little digging and discovered the truth.
In brief, the price was never anywhere near 800K. It only appears that way in hindsight due to subsequent reverse stock splits (merging multiple shares into one). The price at the time was only – get this – 102 bucks.
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Basically, from 2016 to 2017 DryShips did several reverse splits on their stock, eventually shrinking down to just a single unit of stock in anticipation of going private again. Stock charts update retroactively based on this, but the “theoretical values” they show based on the current number of shares is never actually seen in real life.
In November 2016, $DRYS had shrunk to just 7840 shares as far as I can tell (I took the 1 share they had after the final reverse split and multiplied it by the ratios of the previous splits up to where it would have been mid November 2016). Some traders that hadn’t kept track of the decreasing number of shares tried to short it. This blunder put them in a position where they were very easily squeezed because it was reasonably simple and cheap to remove all liquidity from the stock.
In total, at the time, the squeeze went from $4 per share to $102 per share; an increase of 2450%. This only appears as 800K in hindsight because of the reverse splits down to a single stock being retroactively applied to previous prices.
It’s also why if you look at the max length graph for $DRYS on BarCharts it lists its peak of all time as 1.386 billion dollars per stock, back before the company crashed. Compared to that the short squeeze in November 2016 isn’t even visible on the graph.
With these differences in value, and extreme differences in overall scenario, I don’t think it’s fair to use $DRYS as any sort of marker for what to expect from $GME. I will, however, say that the original DD does have good points on setting up your exit strategy; it’s just that it shouldn’t be using the $DRYS squeeze as an example.
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Honestly, I don’t think anything to-date can provide truly useful insights into what will happen with $GME. The Volkswagen squeeze ended quickly after some negotiations, so we never saw what it truly could have reached. Meanwhile the short percentage on $GME is somewhere between 200 and 900% – current best believable guesses indicate 300 to 500%, and the idiots keep doubling down like it’s changing anything but the pay-out. With circumstances that as far as I can tell are historical firsts, there’s really no guessing where we end up. Just strap in and let her rip, let’s see where we land.
TL;DR – just hold, my apes 🦍💎👐