>Disclaimer from Quora: A true short squeeze is a fairly rare event. There are probably 100 predicted for every 1 that occurs.*
>There needs to be an unexpected positive event. This could be a huge earnings surprise, a takeover offer, new patent, drug approval, etc.
>Unscrupulous stock promoters (PUMPERS) often dangle a potential short squeeze as a carrot to entice inexperienced investors to buy a bad stock. For instance, you will find predictions of a “massive short squeeze” on virtually every message board for every penny biotech stock. If you point out that there is insufficient short interest for a squeeze, the promoters just add lies about “naked short selling”.*
There, nobody sue me for the pennies I have. The following is all for entertainment purposes only:
The intro:
Sup gamblers. Feel bad about missing the gain train on TSLA? Fear not - something much greater and stupider is here.
You know Citadel? The MM that took all our money today? Well now we finally won’t be at the mercy of the MMs. Instead, we’re going to temporarily join forces with the Galactic Empire and hijack the death star.
Our choice of weapon... $GME.
The setup:
Huh?? Isn’t GME an absolute piece of trash stock? NO (will explain below), and even if it is, it's not entirely relevant. The this turn around is going to make TSLA's short burn look like warm afternoon tea.
Why? Well, most short squeezes are mostly math. This one is special because we have math AND great underlying news.
To be clear, this will happen whether or not we participate. I prefer us idiots to be a part of history. Here’s what’s up:
Short interest:
GME currently has between 85% - 99.8% short interest, depending on what site you use. For context, 20% is already considered high as the moon. TSLA and NFLX were around 30-40% at their peak. But GME’S ACTUAL SHORT INTEREST IS OVER 110%. In case you think I’ve gone nuts, look below:
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Shares Outstanding (June 2) = 64.8M
- Insider Shares (June 30) = 8.9M
Total = Public Float = SO - IS = 55.8 M
- Ryan Cohen Shares (8/31) = 6.2M
Total = Adjusted Public Float - Ryan Cohen = 49.6M
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Shares Shorted (9/2) = 55.7M
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% Shorted (Total Shares) = 86%
% Shorted (Float) = 99.8%
% Shorted (Adj. Float) = 112.3%
===
This is unheard of. Also, the short interest ratio/days to cover is 16 DAYS right now. Shorts are beyond trapped in their position.
And the insiders? They won’t sell. In fact.. they’ve been BUYING.
Fine, what if the shorts are correct? They’ve been printing for 5 years. Ok fellow gamblers, here’s where the real DD comes in.
The reversal:
3 big things will cause this reversal. Ryan Cohen, retail option buying, and Kenny G (Citadel) himself.
Who’s Ryan Cohen?
Ryan Cohen sold Chewy in 2017 for $3.3 billion. He poured most of his money into Apple and Wells Fargo, saying he hates diversification and only goes all in into things he has high conviction in. Cohen is a Buffet-like investor. He is the largest individual owner of AAPL, and has sat on his hands doing nothing for 3 years.
Until last week… he went long on $GME.
Who cares right? He’s just another gambler like us willing to lose money. Not in this case… RC is special due to his expertise in e-commerce. He understands how a smaller company can compete against Amazon and Walmart despite heavy competition. THAT, combined with his hatred against diworsification makes his interest in GME a bit special.
RC can spin this into an e-commerce/tech company, which would make Wall Street drool from their mouths. He’s already caught the attention of a few people, hence the recent 75% run up since the RC announcement.
RC only needs to disclose his investments every 10 days. If he’s been buying since 8/31, we won’t know until this week.
Add to that, the original contrarian Michael Burry found that 90% of stores were free cash flow positive before COVID. GME’s balance sheet is healthy with $100M in net cash (around $500M cash and $400M debt), s