This one is very theoretical. If you don't know what Im talking about please research this or reread this.
Okay, we know the heavily shorted stock mentioned came off the Threshold list on Feb 3rd. That means they covered almost all of their FTD's (faild to deliver). Many of these were bought in the open market at high prices, however many people have speculated that it doesn't seem to be enough. The market Volume was very low and the sellers to buyers ratio was also very low. could that be enough? They were on the threshold list for 39 days straight and they covered it all in just a few days? Maybe. But what if it wasn't enough? Where did they get the rest of the shares they needed? Remember, if they don't deliver in 13 days after the 3 day settlement period is up, then they lose the right to short sell forever. That is why they have to buy at the higher prices and that is the main reason, along with the hype, that the stock price spiked.
Now lets introduce another player into the game called the etfs. There are several ETF's that have the geemee stock as part of their portfolio. I have only looked at one. you can check out the other ones too. Apparently there are 79 ETF's which hold the stock. I checked out ex are tee. Their chart looks very similar to the chart of the stock mentioned And it is one of their main stocks that make up part of their fund. Maybe Coincidence?
Now, the etf went ON the threshold list on January 29th and has remained there to this very day! IT did not appear on the securities threshold list a single day this year before jan 29th That is the same day that the the short sellers supposedly covered most of their short positions and the geemee spike started to drop as well as about the same time the brokers stopped letting people trade! This etf currently sits at 190% short float. Peaking on 2/1 at over 800% short float! As of 11feb2021, they also only hold 454,595 shares(3.36% of the fund) of the mentiopned stock, coming down from a high of roughly 19%.
​
There is a possibility that the ETF's that had shares of geemeee were used to cover the failed short positions so that it would come off the threshold list. This would create the image that the opportunity is over, however then the ETF's involved would be now in the exact same position that the stock was in just before the spike. This would just move the crisis from one place to another.
This procedure can be mainly done by naked shorting the stock. If a manager wants to short a single stock, but they don't want to go to the extent of borrowing and disclosing the short, they would short an ETF that holds the stock, and simultaneously buy long the underlying holdings that they don't want to short. This Naked shorting ETFs is generally acceptable due to arbitrage, but if one goes long on the remainder of the holdings (not many in the mentioned etf), one can naked short the stock without doing any arbitrage on the ETF. This, when coupled with synthetic longs via options, gives the appearance of shorts covering when they haven't, takes the heavily shorted stock off the threshold security list when it shouldn't be, and provides the ability to naked short the stock again.
​
Comparison of the ETF short positions and the underlying stock
This is a likely scenario how geemeee could actually be shorted without appearing so. This solves the NYSE threshold securities issue and the ability to drive the stock down outside of buying puts. Theres list of etfs holding this stock