This is an automated archive made by the Lemmit Bot.

The original was posted on /r/gmecanada by /u/CriticalMushroom8812 on 2024-09-30 23:23:25+00:00.

[Disclaimer] cross post from user carpetman8900 who does not have k@rma to post here.

Some links have been removed as they link to other subreddits. Refer to OPs post for those.

Long-time lurker here. I’ve been composing a big write-up about GME for several years and I want to share the second part with you guys… Things are up for discussion, and I may have miscounted a settlement day somewhere, but most of it’s rock solid IMO.

Feedback on improvement is very welcome, but I’ve google translated from another language, so don’t fry me over petite grammatical flaws. When GME runs above sneeze levels, I’m going to Reddit and the press with the full story. So the more flaws/fallacies you can spot the better. Crosspost to SS welcome (not enough k@rma).

Towards the end of this wall of text is a very detailed, possible timeline of all the FTD cycles since april 2024 - ending with the beginning of MOASS in January 2025.

April 2024 - Run Lola Run

Between 24-26th of April 2024, when GME was around $10, blocks of unusually large calls (potential future purchase orders) were opened at $20. Calls pressure market makers to hedge (cover by buying shares), which underpins a high share price for a period. The reason is that the market maker must have enough shares in stock if many calls are traded. However, calls have a fee and an expiration date - and if the share price is too low when the time has passed, they become worthless.

On May 9 (after over 3 years of hibernation), Keith Gill suddenly liked a tweet of the famous scene in the film

Run Lola Run, where the protagonist bet on the roulette number “20” - and won. Then, on May 12, Gill sent a meme - now it got serious. D. May 13, in the pre-market (before market opening hours), GME exploded to 80 dollars (equivalent to 320 before the 1:4 split). As private investors do not normally have access to the pre-market, they could not have driven the price movement - was it Gill’s doing?

From 12-17th of May, Gill posted a total of 110 amusing, cryptic memes - they would prove important:

At the same time, approx. 90% of trades ran through the far less regulated OTC market, which retail investors don’t normally have access to either, and GME quickly fell to a steady $20:

In mid-May, huge calls for over 12 million shares opened at $20 - again just like the bet in Run Lola Run. Then, on May 17, GameStop sold 45 million new shares on the market and doubled the savings to $2 billion. It was similar to the same move Cohen had made in April and June 2021 - as GME surged, GameStop sold $1.5 billion worth of new stock. However, the DRS movement was critical of the dilution of GME because the DRS figure fell as savings increased.

On June 2, Gill revealed that he holds 5 million shares and calls for 12 million shares - the cat was out of the bag:

It was later counted that Gill had bought calls for 14 million shares, so where were the rest? The answer had to be found at GameStop. On May 13, when GME hit 80 dollars, GameStop bought back 2 million shares. Gill was probably testing the market’s (algorithms’) response to him trading a big call, and GameStop was just making a natural counter move to the sudden, aggressive acquisition of GME:

(Open for technical discussion. Possibly just Gill, and not also GameStop, purchasing 2 million shares):

But how did Gill time his return? Probably by analyzing calls. It makes sense for short sellers to buy calls (potential shares) if they want the balance sheet to look balanced. LEAPS are a type of calls that can run for up to 39 months. Exactly 39 months before May 2024 was February 2021 when GME was shorted down to $10… In March 2021 GME was pushed down again - these LEAPS’ expiration date would be June 2024. If the theory was correct, his calls maintained such a high share price, that short sellers couldn’t buy new cheap LEAPS when the old ones expired:

At the same time, it turned out that swaps for 2 billion dollars had expired in 2024. Short sellers must have had a hard time hiding the phantom shares:

Back in January 2021, most retail investors had arguably taken $250 (1,000 before the 1:4 split). Now, years of extreme price swings, educating discussions on Reddit forums, and outrage over a blatantly corrupt system that called private investors “dumb money” had left hundreds of thousands with “diamond hands” - they wouldn’t sell until GME hit thousands (or million) of dollars under MOASS. Now you would see bankruptcies, domino collapses and prison time at the corrupt hedge funds, brokers, banks, market makers and clearing houses. Afterwards, a fair market could be built.

The tide goes out - The algorithms are revealed

On June 5, CNBC host Jim Cramer interviewed SEC Chairman Gary Gensler. Cramer accused Gill of market manipulation, but Gensler ruled that everyone is free to talk about and buy stocks: 

The accusation was particularly ironic, since Cramer himself had told in detail how his hedge fund manipulated the market in 2006. Moreover, his job at CNBC for two decades was to promote the buying and selling of certain stocks - for example, he recommended the stock of the bank Bear Stearns days before the 2008 crash…

According to the financial media The Wall Street Journal, the broker E-Trade (an old acquaintance from 2021) talked about throwing Gill off their platform, which was denied. Had E-trade simply delivered IOUs?

At the same time, data revealed that the market maker who had sold calls to Gill had taken the fee without hedging a single stock:

It soon turned out that this market maker was Wolverine - another old familiar from 2021:

The corrupt links in the trade chain had lined up the pieces for their own domino collapse, and Gill seemed to know when it would begin. As the investor Warren Buffett once so poetically said: “Only when the tide goes out do you learn who has been swimming naked.”

On June 6th, what no one had dared to hope for happened - Gill announced a new live stream. Thousands of investors poured in and GME rose to $65. Everyone was restlessly waiting for June 7. It would be the 5th anniversary of Gill’s very first purchase of GME - and oddly enough the 25th anniversary of Run Lola Run.

On June 7, GameStop sold an additional 75 million new shares on the market - the savings doubled again and were now well over $4 billion. With 426 million shares in play on the market, GME had been diluted by 40% in a few weeks, but the savings had quadrupled - a sensible barter for the company. The critical voices grew over the dilution, but the insiders’ investments had also been diluted. In addition, insiders had primarily sold shares for tax reasons for years. Cohen and the board were personally invested in a long-term strategy, and they clearly knew how to do it.

By the evening of June 7, over 600,000 people were tuning in to Gill’s channel, and millions of viewers were watching the live stream on CNBC. Gill enjoyed himself with people on the chat, showed his long position and told E-Trade: “I see those headlines… Don’t make me remove it.” Afterwards, Gill expressed confidence in Cohen’s chairmanship and GameStop’s transformation. Most importantly, Gill demonstrated on live TV that he did not have the control that the financial media claimed. Time and time again the stock price changed instantly based on Gill’s carefully chosen words and phrases - it was impossible Gill was pulling the strings:

The many price fluctuations triggered limps (small pauses where trading is stopped if the share price changes too quickly). According to the SEC’s rules, you can only short when the share price is on the way up - except during a slump. Gill demonstrated that short sellers deliberately used algorithms to fabricate halts to manipulate the market:

During after-hours (after market close), GME inexplicably jumped between $30 and $60. Gill’s calls for 12 million shares, GameStop’s sale of 45 million new stocks, and the market maker’s tons of FTDs approaching delivery suddenly caused the algorithms to lose control of GME: