Wow - what a week. This is an extension of my DD series on GME. If you haven’t read them and have time, they will provide some background on my previous predictions, some of which have already come true.
Previous Important Posts
- EndGame Part 1 (DTC Infinity) covered the short positions, the float, and potential snowball impacts of increasing prices, and argued that part of the reason that shorts haven’t closed was that it was pretty much impossible for shorts to close
- EndGame Part 2 covered Cohen, fair market cap analysis, and potential investors, in which I talked about the amazing mid-to-long term potential for GME.
- After the Citron tweet, I shared this fan fiction on what looked like blatant market manipulation by shorts on the day of the tweet, and offered some education on strengthening your position. This one got buried and is worth reading.
What’s happened thus far
Why did GME go up on Friday?
The story here is more complex than paid media articles would like you to believe. GME has been driven up by 3 different forces:
- Organic buying
- There is a mixture of growing positive sentiment in the investor world (not just WSB) about GME’s future
- There’s been a lot of good due diligence shared not just on WSB but even outside (for example, see gmedd.com)
- The Citron Backfire
- Shorts were on the ropes and kept looking for hail mary’s. They went to Citron and coordinated a dump to try to bring the price down.
- However, this backfired. Citron is so disliked in the industry that new wealth poured into GME in the face of Andrew Left’s pleas. Even when Benzinga brought Andrew Left on air, minutes after he left they bought shares live on their show.
- The next day, our very on u/Uberkikz11 was on Benzinga and more shares were bought.
- Larger investors piling in
- In my EndGame Part 2, I hypothesized that we’d soon see larger investors pile in. Then, on WSB, we saw posts from a venture capitalist as well as a hedge fund investor
- Gamma squeeze
- Once the organic buying started, we rolled into a gamma squeeze. Many people written about the gamma squeeze so I won’t repeat, see this post for an example.
- Ultra low liquidity - In EndGame part 1, I talked about how the actual actively traded shares are much lower than the reported float, and share availability has been reducing driven by lots of diamond hands, not just among smaller guys like us but the larger folks too.
- I believe there were some short covers on Friday, but Ortex was still estimating 71M shares short at the eod.
However, not many people have talked about why it went down
Why did GME come down?
Here’s where things got interesting for me, and something I think happened again today (Monday) when GME climbed up over 100% but then had a rapid reversal, closing 20% above yesterday but closing below open.
So Friday looked like a slam dunk - gamma squeeze, no shorts available to short, puts were getting exceedingly expensive as a short tactic. What happened?
This is my fan fiction, based on what I saw.