Reasons to Buy GME – Buy and Hold GameStop

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*This post is for my reference & assurance to buy and hold GME, and not as financial advice.

Update 12th Sept 2021: 
Entire naked shorting game plan playbook posted on a forum in 2004. They called it “Cellar Boxing”.
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“The most effective way is long-term investors slowly accumulating and holding thus drawing the MMs out of its defenses making them as naked as their short position. This is war so this slow accumulation and holding for the long term easily achieves the desired effect to force MMs to cover and knock off the tactics or bury themselves deeper.”

elephant in the room

Investing in GME GameStop Value Buy

Contents

Ryan Cohen speech at GameStop AGM 9th June 2021

We ushered in a whole new era of GameStop.

On a personal note, I want you to know I’m humbled to be elected to your board and serve as your Chairman.

We have a lot of work in front of us, and it will take time.

We’re trying to do something that nobody in the retail space has ever done but we believe we’re putting the right pieces in place and we have clear goals: delighting customers and driving shareholder value for the longterm.

The management team and refreshed board will remain totally focused on
these goals at all times.

We know some people want us to lay out a whole detailed plan today, but that’s not gonna happen.

You won’t find us talking a big game, making a bunch of lofty promises, or telegraphing our strategy to the competition.

That’s the philosophy we adopted at Chewy.

Here are a few things we’ve done so far: refresh the board, added technology and retail experience to the leadership team, paid off all our long term debt and strengthened the balance sheet, and begun laying the foundation for long term growth.

Moving forward, we want you to judge GameStop based on our actions, not our words.

Thank you everyone, and as my dad would say, “buckle up.”


SuperStonk Library of DD, Artbooks, and Periodicals

SuperStonk Library of DD Artbooks and Periodicals

Link to SuperStonk Library of DD, Artbooks, and Periodicals
More GameStop Due Diligence

DFV who is not a cat.

DFV all in

House of Cards – Due Diligence by u/atobitt

House of Cards PDF Full Version 2021 – complied by u/arkkadius

House of Cards

summery

 

  • GameStop $GME No debt, flush with cash, and a new team from Chewy and Amazon leading the transformation.

    gamestop new team

Quotes from Warren Buffett;

  • Only buy something that you’d be perfectly happy to hold
    if the market shut down for 10 years.

     

  • Nobody buys a farm based on whether they think it’s going to rain next year, They buy it because they think it’s a good investment over 10 or 20 years.

     

  • If a business does well, the stock eventually follows.

     

  • Buy a stock the way you would buy a house. Understand and like it such that you’d be content to own it in the absence of any market.

     

  • Time is the friend of the wonderful company, the enemy of the mediocre.

     

  • Opportunities come infrequently. When it rains gold, put out the bucket, not the thimble.

     

  • Our favorite holding period is forever.

Warren Buffett: Why you Shouldn’t Short Sell? (GME)

 

GME GameStop Short Squeeze 

Gamestop Moon

mcuban hold gme

 

Naked, Short and Greedy: Wall Street’s Failure to Deliver – Part 1 (Dr. Susanne Trimbath)

TL: DR 🦍 Summary:

CEDE & CO

  • Cede & Co is a nominee name, banks and brokers have custodians they use for securities registration, any shares registered with a nominee signals the stocks are being held for someone else.

  • Cede & co came about owing to a paper crisis as trades increased, and they became the nominee to hold a majority of securities.

THE BIG ISSUES

  • In a perfect world, there’d be no naked short selling.

  • In underwriting agreements, MM or agents can sell more shares than they have to meet market demand. When a share is borrowed, the rights of the share borrowed are also distributed with it

  • Brokers can know whether something purchased is borrowed if it is marked, but often direct buyers (retail) don’t know that they are buying short, borrowed shares.

  • There have been many cases of violations of brokers ‘forgetting’ to mark shares as short just so they can open the short position, even if this later has a high likelihood of becoming FTD because shares without this designation are more likely to be bought by brokers.

BYRNE AND OVERSTOCK

  • This problem of naked shorting, and by extension, overvoting is not restricted to GME at all, in fact, it appears to be a major issue industry-wide.

  • Even the CEO of the company Overstock, purchasing their own stock, couldn’t have their broker find the actual shares purchased, it took 2 months before they did.

  • The fact GME traded nearly 4x its float in 1 day is insane.

ETG LAWSUIT AND NAKED SHORTS

  • ETG filed a lawsuit that was settled outside of Court to keep things hush-hush, but it was based on their shares outstanding vastly exceeding their float.

  • You will likely never hear publicly about successful cases if settled.

  • Penalties have only recently been introduced for FTDs.

  • What’s the incentive for them? Money. It’s always money.

  • Before, they would take someone’s cash via FTDs, to then make more cash and only get a slap on the wrist for doing so.

DTC COMPLAINT PROCESS

  • DTC has a list of issues to rectify sorted by value alone.

  • By driving the price down, the short seller not only drives the price to the ground and makes money, but because investigations are dealt with on a value basis by the DTC, the further the price goes down, so does the priority level of the issue, in the DTC’s books.

NAKED SHORT ENDGAME

  • Driving a stock price down restricts the availability of capital, which in turn assists in running the company out of existence as they can’t issue to generate capital.

  • The ultimate goal of naked short sellers is to make the company worthless, at that point, every action they’ve taken to manipulate the stock price and hinder the DTC investigating disappears into shredders and archives. 

FTD’S, BANKS, SEC EXAMINERS

  • Evidence and history have shown that the SEC will step in to help the FTDs of the banks, but they historically will not help other stocks such as GME.

  • The evidence is that the SEC prevented naked short selling of the bank stocks and no one else’s; whereas in Europe and Asia they protected all stocks from naked short selling.

  • Historically SEC examiners would approach the DTC and just ask, what do you do? (these are supposed to be professional examiners keeping brokers in check)

  • Dr. T then clarifies a lot of these people (brokers) ‘learn on the fly’ and the qualifications they hold are less difficult to obtain than a barber’s license in most states

  • The fundamental understanding of brokers is therefore suspect

COMMUNITY QUESTIONS

  • Actionable steps that could be taken include, visiting https://www.nasaa.org/ and contacting their local securities administrator as they will pay attention, as her friend Patrick did. These are the people that want to know about this stuff.

  • Dr. T’s position is that overvoting is a huge problem, and it is not solely confined to stocks such as GME. In fact, even now 85% of stocks are over-voted and that’s because of the influence of a company who deals in trying to fix it, before, 100% of stocks in 200+ test cases were regularly overvoted.

  • Where stock is over-voted, this provides proof the stock is naked short sold and/or has a high number of FTDs. A problem prevalent throughout the industry.

THE EVIDENCE

  • The direct evidence of naked shorting exists and remains today in that over ⅓ of companies receive more votes than are actually outstanding.

  • FTDs have been classified in a new way, ‘open positions for which a trade guarantee is applied’ and on Atobitt pulling the same report Dr. T did at the time of her book, the problem has risen from a $4bn problem to a $183bn issue.

  • Dr. T explains she is not surprised the problem has grown to this extent, owing to the advent of ETFs, Mutual Funds, and increased trading, etc…

  • Dr. T warns all apes that you need context, like a denominator (her example, the Clearing Fund) in order to contextualize and understand your DD and appreciate the bigger picture.

GET OUT OF JAIL FREE

  • In 2005, FTDs and naked short selling resulted in a (relatively if you read on) small $4bn problem. Now, the problem sits at $183bn, with a jump of over $40bn from just 2019-2020 alone.

  • Whilst stocks traded from 1999 to today’s date have increased by 23%, failures to deliver have grown by 95%.

  • Dr.T is not surprised owing to the increase in trades, ETFs, and mutual funds, and notwithstanding this, the number of trades and the Clearing Fund didn’t rise at the same rate as the FTDs as the potential loss.

  • Atobitt’s theory is they just want to have more cash on account to cover the fails, and Dr. T clarifies that the Clearing Fund just is not enough as it wasn’t in the 2008 financial crisis.

  • Overall, Dr.T and Atobitt agree the players think they have ‘too big to fail’ status to obtain a get-out-of-jail-free card.

  • Dr.T also states the Clearing Fund used to be based on your activity in the market, but the recent changes do not reflect that.

PUTTING THE FAIL IN FAILURE TO DELIVER

  • Fails to deliver were not properly calculated until after the 2008 crisis. Dr. T expected the Clearing Fund to rise when failures were introduced, but she still feels it is too short (ironic no?).
  • The DTCC and its subsidiaries are self-regulated and are therefore only beholden to the SEC and public review (hence rule changes anyone?)

  • When the rule changes occur, the cockroaches appear.

  • If fails and naked shorts were called out in the open, Dr. T predicts the numbers of both would drastically decrease.

NEW RULES, AND HOW WE MAKE A DIFFERENCE

  • Dr. T thinks that the difference apes are making is clear when you look at the DTCC and its subsidiaries.

  • We actually have them taking action, to combat the issues we are talking about.

  • Making rules changes acknowledges the problem, and acknowledgment is the first step to solving it.

HOW THE EURO-APES SAVE THE DAY

  • Dr.T also speculated that legislation in the EU has the potential to be a driving force for further systemic change.

  • The reason the EU legislation may be a driving force is that they seek to pass legislation to force buy-ins for failures to deliver.

  • If it takes effect in Europe, it could ripple across the pond.

Naked, Short and Greedy: Wall Street’s Failure to Deliver – Part 2 (Dave Lauer)

TL: DR 🦍 Summary:

OPENED MY EYES

  • Concerns over naked shorting are not just isolated to GME, there are concerns of this across many stocks.

  • Lending credence to our theories over the manipulation of the Short Interest Data through the options market.

  • Dave subtly mentions that through his research of public data he has seen significant manipulation in different stocks. Could not elaborate further though.

SEC

  • Government regulators move at a snail’s pace. This isn’t because they are corrupt necessarily, but rather this is the way of things with regards to the bureaucracy of government.

  • Gary Gensler coming in as chair is promising, as he seems to be regulation-minded which is exactly what we need right now.

  • The way to make this stuff move quicker is to keep the spotlight on it. Keep doing what we are doing.

RACE TO ZERO LATENCY

  • The markets still employ archaic principles that made sense years ago, but now simply hold us back from having the best outcomes that we could achieve.

  • high-frequency trading in many ways can exacerbate extreme moves.

  • Latency requirements and competition over latency have increased over the last fifteen years – we are talking microseconds for transactions.

NATIONAL BEST BID/ OFFER (NBBO)

what is NBBO

  • Markets are designed to help us figure out what something is worth monetarily, and the NBBO helps with that price discovery.

  • Lit exchanges (NASDAQ, NYSE, IEX) are where you get price discovery (what is the stock worth)

  • Dark pools / off-exchange trading (NBBO) just ride off the lit quote but don’t affect it

  • In Canada, in the UK, in Australia, this kind of setup where trades go to someone like Citadel or Virtu is illegal because it can DAMAGE THE MARKET

THE WEB

market complexity

  • The market is an incredibly complicated, interconnected web of different exchanges.

  • it’s more expensive to actually go direct to the exchange, relative to going to a dark pool. Labeling exchanges “Toxic Venues”.

  • This is due to access fees:

    • A fee cap of 30 cents per 100 shares was implemented in 2007.

    • This has led to exchanges competing over rebates.

    • However IEX does not charge this, they charge only 8 cents per 100 shares on either side. (buy and sell)

    • Access fee cap hasn’t changed is forever, leading to exchanges fighting over ‘rebates’.

SHOCKING, RAMPANT MANIPULATION

  • Price manipulation through ‘short ladder attacks’ or wash-trading is still being actively used and it is RAMPANT.

  • The sheer volume of data on a daily basis helps hide these tactics.

SPOOFING AND LAYERING

  • An ‘order book’ is essentially a collection of the highest prices someone will pay to buy, and the lowest prices someone will sell for security.

  • Depending on volume, if the price rises, more will sell and if it lowers, more will buy.

  • ‘Spoofing’ starts when an HFT speculates the price will rise above the current ‘lit’ price.

  • The speculation is that this price rise will happen very quickly, and HFT trading systems rarely hold onto inventory even for minutes, but more commonly milliseconds.

  • To sum up, where an HFT strategy determines the price will increase, ‘spoofing’ is the act of creating artificial ‘demand’ to essentially trick these HFT systems into thinking there is demand and they will then buy a stock en masse.

  • This in turn drives up the price as the other HFT take the artificial demand as a buy signal, to the point the spoofers sell price is reached, which allows them to sell at a favorable price for a profit. (Writer’s edit: Even the bots can be manipulated)

THE BROKEN PART FALLACY

  • Non-linear systems are not easily explained. Just because 1+1 = 2 is simple for apes to understand does not mean that this is the case for HFT systems.

  • Complex, Non-linear systems as designed and described by Dave, ultimately are incredibly sensitive, and any number of factors can lead to flash crashes, not just manipulation, but this too isn’t out of the question.

  • Boiled down, not even regulators can predict the impact that changes on these systems may have, and history shows that it can be extreme.

FLASH CRASHES

  • Jack mentions to Dave that GME has seen many events that could be considered a ‘flash crash, such as the March fall in price from $345 to $173**.**

  • Dave clarifies that crashes such as this may not be inherently manipulative, in that algos are just trading as designed. When 90-99% of the liquidity of a stock is provided by HFT systems; in the event of an increase in liquidity occurs or when HFT’s determine they hold too much inventory, they may be programmed to ‘pull out’ which can cause a snowball effect on other systems and crash the price.

  • Notwithstanding the above, Dave does not discount that manipulation is an impossibility at all, but thinks it is important to recognize HFT systems can act on a positive feedback loop as described.

ORDER TYPES, NOT SO SIMPLE

  • The markets are becoming so over-complicated with all these different types of orders, that not even the exchanges can keep up.

  • NASDAQ has been fined in the past for not being able to keep up and understand the orders on their exchange.

PAYMENT FOR ORDER FLOW

  • PFOF is more trouble than it’s worth.

  • It has been shown that PFOF can be affecting the spread at much at 25%.

  • It is very profitable for a large firm to trade against/ ahead retail orders. I am speculating here, but this is likely why this is such an important fight for Citadel. We, the customer, are actually the product, just like with social media.

DARK POOLS, INTERNALIZERS

darkpools internalizers

otc trading gme

  • So every time Citadel internalizes a trade, it gets printed publicly, every time, Goldman Sachs or Morgan Stanley, or JP Morgan executes a trade in their dark pool, it still gets printed publicly.

  • I’m always interested in learning more, I mean if there’s a mechanism by which someone thinks they’ve figured out how they can suppress the price through dark pools, I’d be really interested in that, because it would directly impact some of the analysis that I do.

IEX

  • IEX has a lot of functionality that can make for a better retail trading experience.

  • If IEX is something that you are interested in trading on, then contact your broker and let them know

WHAT CAN WE DO?

  • Reach out to the SEC, members of Congress, FINRA

Naked, Short and Greedy: Wall Street’s Failure to Deliver – Part 3 (Carl Hagberg)

TL: DR 🦍 Summary:

ROBBER BARONS

  • Carl explains that he was a ‘college dropout’ but worked his way towards a masters’ degree paid for by his employers.

  • Too young for college, Carl made his way to the Manufacturer’s Trust Company, where he excelled with his knowledge of long division.

  • Carl states at that time, most companies that dealt with stocks and bonds were ‘trust companies’ i.e. a specific company that acts as a fiduciary, trustee, or agent of trusts and agencies.

  • This was the case owing to companies doing… questionable things with their own books when left to do it themselves.

  • Carl lays out two rules for Trust Companies:

    • 1. Customers and stockholders come first.

    • 2. Debits and Credits MUST be equal.

  • Why? In the time of the ‘Robber Barons’, “...when they needed some extra money, they would print up some new stock certificates and sell them into the market“ Sounds like naked-short sellers are just the new Robber Barons

  • Finally, a trust company’s purpose was to ensure money gained from issued shares was put back into the company, and at that time, retail owned 70% of stocks.

THE PAPERWORK CRISIS – A BIG MESS

  • At some point, share ownership became democratized (i.e. made accessible) to everyone, likely pushed by Merryl Lynch campaigns, and stonks went up with the increase in volume.

  • Problem? Paperwork crisis. Put simply, shares were traded by paper and the stock exchanges literally could not keep up**. They didn’t even have handheld calculators, much fewer computers, so brokerage firms failed** en masse**. As Carl puts it? It was a big mess.**

  • In order to solve the ‘paper crisis’, Carl and ‘leg men’ like him went out, took surveys, and tried to find solutions.

  • The above together with the advent of computing, and the birth of the securities depository, resolved the crisis within 2 years. 

THE GOOD, THE BAD, AND THE UGLY

  • Through this wealth of experience, Carl saw the good, bad, and the ugly in boardrooms, and learned to invest where he saw good.

  • Carl clarifies the issue of short-sellers, or vulture capitalists is an issue long faced in the industry.

  • Carl explains when he was a young boy (not in Bulgaria) he had been a part of shareholder meetings and can spot a good and bad CEO.

  • Carl goes on to explain that the issue of short selling has been going on for years and years, such that even good companies having even a ‘bad year’ could be shorted out of existence.

  • Carl then used his position and experience to create his own company and many clients were then asking, how is it possible 150% of my shares have voted?

  • How? Short selling and naked short selling.

  • Carl explains that even in non ‘naked’ short-selling situations, both the lender and buyer have voting rights, which leads to an increase above the total percentage of stockholders voting in an AGM.

  • When the sellers vastly outweigh the buyers, you have people trading in ‘phantom shares’ such that the sellers and buyers do not match the total stock, or float as we all well know.

INFINITE LIQUIDITY CHEAT CODE

  • Unfettered securities lending is a very problematic thing. A system such as this allows for what can essentially be described as “Infinite Liquidity” meaning they can just borrow again, and again, what was already borrowed before**.**

  • Further to the last point, these problematic securities lending practices lead to dilution of not only the value of the securities in question but also their voting power as well.

  • Ato reflects that borrowing against borrowing (read: hypothecation) is exactly what is going on with GME right now.

  • Carl agrees and goes on to state the then CEO of Overstock and Wes Christian led the way in exposing this behavior.

  • Carl then goes on to state that sometimes short-sellers genuinely believe a company will go bust, but other times, rumors would spread which, taken together with a fall in stock price, would seem true**, even if it wasn’t.**

  • Carl, Ato, and the mods agree such behavior is unethical and illegal.

SUPPLY AND DEMAND, OUT THE WINDOW

  • Carl explains that the issues raised here were noticed by the SEC and have been for some time, except they have a terrible track record of doing anything about it**.**

  • Not even their own report, which detailed actionable steps from their Office of Audit was followed and put into practice. Oh, except 1 of 11**.**

  • What’s worse is that temporary regulations, like bandaids on a leaky pipe, fell off and nothing concrete was ever put in place to prevent this from happening.

  • Further, these issues and problems never truly saw the light of day as the investigations were based on dollar values**. What does short selling do?** Decreases the price and therefore, so decreases the chances of investigation and notice**.**

  • Allowing naked short selling throws the laws of supply and demand out the window.

  • The only way Carl sees the problem can be resolved is to have debits and credits equal to one another, or this will just keep continuing.

WHOSE VOTE IS IT ANYWAY

  • Carl explains that it is very rare that votes ever exceed 100%, so often the issue of short/naked short selling rarely comes up. Wonder what happens when it does?

  • Carl then explains a famous merger happened on the basis that those who lent their shares became unable to vote on the basis they lent their shares and in fact, those they lent succeeded in making a horrible deal**.**

  • Carl then goes on to explain somehow, when this does happen, it gets ‘straightened out’ and no one understands how.

MONSTER MONEY

  • Carl explains that the game for institutions and mutual funds is to make millions by lending shares out any which way you can, including allowing retail investors to enter agreements to allow them to do so without providing much obvious notice.

  • Carl explains that the game for institutions and mutual funds is to make millions by lending shares out any which way you can. Including, allowing retail investors to enter agreements without being super to allow them to do so without providing much in the way of obvious notice.

MATHEMATICAL IMPOSSIBILITIES

  • The vote count is the missing piece of this puzzle as of now.

  • Carl essentially confirms that it seems mathematically impossible that the shorts have covered.

  • He goes on to stress how difficult it would be for the bad actors in this situation, to reconcile the votes prior to the meeting.

WE NEED A GOOD PLUMBER

  • Carl states he is hopeful that we will see change with Gary Gensler taking the lead. Going on to say we need a so-called “Plumber” for this system, someone to do some real work on this messy system.

  • Carl touches on a similar topic to what Dr.T was talking about, with regards to legislation being worked on in the “Eurozone” that could really bring forth material change.

  • Voting and being outspoken is the best way to force a solution here, and if you cannot vote, find out why from your broker, because as a shareholder, who has entrusted your money with this company, IT IS YOUR RIGHT.

FOREIGN VOTING

  • This is one of the more difficult matters to address, solely due to the fact that foreign investors usually don’t vote, or don’t care to vote in corporate elections across the pond.

  • Despite the difficulties, remember, VOTING IS YOUR RIGHT. If you are investing your hard-earned money in a company, you’re damn right you deserve a vote.

  • If you are a Euro-Ape and your broker is being sketchy about letting you vote, you must do everything you can to speak up and speak out.

ADVICE FOR GAMESTOP

  • Carl’s advice to the heads at GameStop:

    • PAY VERY CLOSE ATTENTION TO THE VOTE REPORTS

    • Read the Mail and Email from the stockholders, pay attention to those that feel disenfranchised

    • Hire an especially diligent inspector of elections

    • “TOUGHEN UP”

  • In past circumstances, predatory short-sellers have gotten away with this game– pushing the stock price to the point of being delisted so they don’t have to ever reconcile their massive dump of phantom shares.

    • There was confusion over the last section of the interview when Carl stated that shorts don’t HAVE to cover, I believe if you take this statement in context with the rest of the AMA, he is clearly referring to shorts having to cover, generally. Carl already states multiple times in the AMA that he is very optimistic about this GameStop situation. Anyone trying to twist this narrative is acting in bad faith

Naked, Short and Greedy: Wall Street’s Failure to Deliver – Part 4 (Lucy Komisar)

TL: DR 🦍 Summary:

DEATH SPIRAL FINANCING

  • Lucy goes through and breaks down the situation surrounding Sedona (A software company) who was targeted by similar short-seller tactics to GameStop.

  • In order to explain Lucy’s case in point, she explains the story of the Badian Brothers and a company named Sedona. Sedona decided to finance a $2.5 million dollar loan where repayment was going to be made via shares, with the number required to be repaid dependent on the stock price at the ‘conversion’, i.e. 250,000 shares if the stock was at $10, or 2,500,000 if the stock was at $1.This would later be dubbed ‘death spiral financing’.

  • Sedona shouldn’t have been hurting as bad as it was, the company had a lot going for it, but for every piece of good news that would come out, the stock wouldn’t move or it would even go down (I wonder where we have seen that before). The goal was partially to carry out an asset grab on the company.

  • “Wes Christian told me that more than 1200 hedge funds and offshore accounts were working through more than 150 broker dealers and market makers to strip these small and medium companies of their value with these death spiral deals.”

  • It was thought that RegSHO would help prevent the abusive short-selling practice but there were too many loopholes that would then go on to allow the activity that we see today with $GME.

  • Lucy explains Reg SHO is littered with loopholes that, for example, don’t count fails to deliver on nonpublic exchanges! But

  • “And in the end, as we go down and look through the years, the decades… it ends with GameStop.

SEC INTERVENTION

  • Historically, The SEC has not had a good track record in punishing the “big guys” for their misconduct, beyond a fine and a slap on the wrist. This has been corroborated by many different individuals at this point.

    • This is why it’s such a big deal that we are seeing The SEC working to change things now!

  • Wes Christian will have a wealth of knowledge on the legal side of this conversation.

  • Lucy goes on to mention that going through with legal action has worked, somewhat, in the past. Once a case enters discovery, that’s when the really juicy stuff can be uncovered.

JOURNALISTIC INTEGRITY? NEVER HEARD IT!

  • In order to illustrate how the media can be bought and is corrupt, Lucy explains the story of Anthony Elgindy. Elgindy was an Egyptian who liked to pretend he was an Italian and ran an online messaging board, but not in the same vein we are now accustomed to.

  • This webpage was a hitlist, except it did not target people, but companies. Elgindy had contacts everywhere, including the SEC. So not only would this website determine which company was next to be hit; it would prompt SEC investigations to tank the price and paid for articles, as journos were on the take.

  • Journalists and others were bought using prepaid bank cards, which had a set sum of money that could be drawn from an ATM, usually in the region of $20,000-$25,000.

  • Elgindy was so connected he managed to somehow know about, and profit from (Editor’s note, I can’t contain my disgust) the 9/11 attacks, given he likely knew they were to happen and advised others to sell their entire holdings the day before**.**

  • Elgindy is now allegedly deceased, but no proof to this effect has been provided.

  • Notwithstanding the above disgust, this shows unequivocally that the media can, and has been, bought…

COMPROMISED MEDIA

  • Lucy is shown the infamous Jim Cramer interview where he is talking about how he as a short seller would manipulate the narrative to fit his needs

  • When asked if she believes that mainstream media could be compromised, Lucy points out that in many cases the stories are picked up and spread out of laziness more than malice. Now that is not to say everyone is innocent, but many are just reporting “tips” or Press Releases without researching further.

  • Compensation can often mean many things to people, so when we speculate that someone in the media might be “Paid off” to report that a company is going to zero, it might not be cut-and-dry with regards to the methods of compensation.

  • How to find trusted sources of news, Lucy’s recommendation:

    • Check for evidence of claims made by said source

    • Document the claims to fact check later, most people never go back to see if what’s being claimed ends up to be true “People tend to forget”

  •  the one quick way to avoid being deceived is to stop watching that media”.

THE ELEPHANT IN THE ROOM

  • Lucy Komisar drops the amazing bombshell that she considers us the top source for well-researched and cited investigations into GameStop. Furthering that point by saying that it’s been decades since she has ‘wasted her time’ with television news as they are often reporting poorly researched, many times incorrect, information.

  • “If you want to avoid being deceived then my advice is to stop watching that media

  • Elle brought up a clip from the most recent Financial Services Committee meeting on Gamestop, where Representative [???] calls into question the tireless research r/Superstonk performs

  • This representative is then called out on his ignorance regarding our community, with Lucy scoffing upon being shown the video “he’s so ignorant.”

  • Lucy also shared our frustration regarding the participants in the hearing, essentially ignoring the main problem the whole time… which as we all know is Naked Short Selling.

  • When asked whom she thought was the best at all the hearings, Lucy says Keith Gill (u/DeepFuckingValue). Her reasoning was that he was one of the only ones to actually touch on the real issues here, and beyond that, he was intelligent and well-spoken.

OVERSTOCK AND PATRICK BYRNE

  • As with our past guests, Lucy touches on the Overstock situation. Walking us through some of the events that transpired.

  • Overstock was a company that had been targeted by predatory short sellers in 2004.

  • Patrick Byrne (CEO of Overstock) filed suit against 11 huge brokers for using methods that we see being used on GameStop. (Lucy expands on how options can be used to create “Phantom Shares’ above.)

  • Lucy believes that the similarities between Overstock’s manipulation and Gamestop’s manipulation are too big to ignore, going on to say that the Overstock situation is where a lot of the techniques we are seeing today, were perfected and refined.

BENEFITING FROM UNFAIRNESS

  • The solution has been clear for ages, perpetrators of these large-scale financial crimes must be punished with more than just a fine. These fines are no more than a “Cost of doing business”, this problem has been pervasive for far longer than it should have been.

  • Those that knowingly manipulate our markets for their gain, must be given serious jail time. 

WE ARE THE SOURCE

  • Lucy praises r/Superstonk’s DD, purely on the basis the authors of the DD and others cite their sources and data, which Lucy always follows.

  • In response to the question on how to understand the number of shares outstanding, Lucy states it seems apparent FINRA and the DTCC know what happens openly, but not off-exchange which is where the real dirty stuff goes on.

  • Ultimately, it is Lucy’s opinion no private person (or ape) could ever know the number of shares outstanding, those with the best idea would be the DTCC and its umbrella companies, but neither they nor the big prime brokers seem like they’re going to spill those particular beans.

APES AND ANTS

  • In response to a query from a Euro-ape regarding the prevention of naked short selling, Lucy explains she is not so familiar with Europe but is very familiar with South Korea and applauds their efforts at tackling the issue.

  • Lucy recalls that an attempt in the US was made to prevent naked short selling, via assigning each particular share a unique numerical identifier, and in order to short, that share’s ‘number’ must not already be spoken for in respect of another short position, or else it can’t be shorted. This got completely knocked down more than 10 years ago. Nothing to see here, move on. Lucy hopes this can be revived again.

  • Elle explains that those from South Korea call themselves Ants, just as r/Superstonk does apes; all are welcome here. 🐜

  • In response to a question regarding being threatened, Lucy explains she has not received personal threats. The biggest threat to her as an independent, investigative journalist is the threat of never having her stories heard.

  • Lucy then goes on to state she hopes to be published for her book which seeks to outline in great detail this story, which couldn’t possibly fit within an hour of interviewing.

  • Lucy believes it is important never to put anything behind a paywall, and thanks any and all who could support her in any way. The apes are grateful for her time!

  • Lucy’s final message? Keep doing what we are doing. Expose the truth, follow the numbers and the data.

  • As an aside, she implores apes to check out the UK and Canada, as well as the US as this stuff is not isolated completely within the US market. At least the US market does not allow rehypothecation above 140%, whereas in the UK there is no limit at all**. Hear that UK apes? Get digging!**

  • Finally, Lucy explains that the appointment of Gary Gensler is bullish… no wait, a good thing on the basis he seems better than the previous 9 before him, but only time will tell whether big G slaps iron-on wrists, instead of just polite business cost slaps we have seen in recent times.

Naked, Short and Greedy: Wall Street’s Failure to Deliver – Part 5 (Wes Christian)

 

 

Naked, Short and Greedy: Wall Street’s Failure to Deliver – Part 6 (Lucy Komisar & Wes Christian)

 

 

Wes Christian on Fox Business

CNBC Full 15 Minute Interview with Garry Gensler HD (Unedited video feed)

The first page of the letter /u/dlauer referenced today on CNBC.

Written by Citadel, to the SEC in 2004

Citadel arguments 2004

Here is the SEC Comment letter that was written by Citadel in 2004 that /u/dlauer is referencing, which discusses conflicts of interest for payment for order flow, and internalization without meaningful price discovery, etc.

Source:
https://www.sec.gov/rules/concept/s70704/citadel04132004.pdf

alternate link

The 2 mins clip, that CNBC removed from the interview with Garry Gensler, Chairman of the U.S. Securities and Exchange Commission

 

Appreciate all the r/Superstonk mods that helped put the above together.