Serious Researchers Needed Now: I think I know What Happened
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| Author       | Source       | 
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|  [u/ahh_soy](https://www.reddit.com/user/ahh_soy/) | [Reddit](https://www.reddit.com/r/GME/comments/ljwo3v/serious_researchers_needed_now_i_think_i_know/) | 

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[DD](https://www.reddit.com/r/GME/search?q=flair_name%3A%22DD%22&restrict_sr=1)

SCROLL DOWN FOR THE ORIGINAL POST

update 7:

<https://www.reddit.com/r/GME/comments/lr61hr/serious_researchers_needed_now_update_7_citadel/>

UPDATE 6 can be found here:

<https://www.reddit.com/r/GME/comments/lq0cqh/serious_researchers_needed_now_update_6_fake/>

[UPDATE #5]

Reverse Arbitrage Theory

I've been reading the research people have sent me and tracking down some leads. Thank you all. It's some great work and I'm still in the middle of it. I came across something I'm going to post on it's own before I get into much of what you all sent me. It's another wild ass theory of mine. Help me figure out if it's true. Here goes:

1.  We assumed that GME price fell due to the temporary halt on buying. However, during that time Blackrock and Vanguard and a few others I believe were still letting people buy, but moreso were buying themselves. What other groups were buying at that time?

2.  Why would a stock everyone was willing to buy at a high price (I bought some at 315) suddenly go down in price? Everyone knew there were still millions of us willing to pay more, as we are right now.

3.  Who wanted the price to go down? (Everyone who had already shorted it)

4.  Both GME and XRT continued to be heavily shorted before, during, and after the spike in GME.

5.  There is a thing called the uptick rule, which was eliminated in 2007. However in 2010 a new uptick rule was enacted:

"The 2010 alternative uptick rule (Rule 201) allows investors to exit long positions before short selling occurs. The rule is triggered when a stock price falls at least 10% in one day. At that point, short selling is permitted if the price is above the current best bid." - Investopedia

This is supposed to prevent short sellers from using the practice of shorting to lower the price of a stock intentionally. Guess who is exempt from this rule? ETF's.

Now if an ETF is shorted to lower it's own price, and after that is done is redeemed for the underlying shares, can those shares be said to be worth less than the market price of the underlying stock? Can they then be sold at a lower price than market? What if the ETF's with GME in them were shorted for this purpose and then the XRT was redeemed and the GME in them was sold at below market price, thus driving the price of GME down without breaking any rules?

Just a thought. See if you can verify it.

Also, GME is GameStop's common stock and " if you own shares of a company's common stock and that company announces that it will pay a dividend to its shareholders, then you will receive the dividend." - [zacks.com](https://zacks.com/)

GameStop was paying dividends quarterly (4 times a year) at least through 2019. There is a theory going around that they are going to be paying a dividend in March, but I can't find any info on it.

If so, what happens to naked shares? Shorted shares? Some people are claiming that everything has to be covered by then. Is this true? Can anyone verify?

For context, a few years a go XRT had only issued 11 million shares, while at the same time there were 77 million shares of it already on the market. So what would happen if they went to pay a dividend? 11 million get it, but another 66 million are expecting it because they don't know that they don't own real shares. This is why some think the HF's have to cover before GameStop pays dividends. Other talk about taxes.

Also, Coraua in the comments section mentioned a great interview with a Billionaire investor where he explains the situation. It's here: <https://www.youtube.com/watch?v=_TPYuIRVfew>

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[UPDATE #4]

Gentlemen, I rest my case:

[![r/GME - Serious Researchers Needed Now: I think I know What Happened](https://preview.redd.it/kqcj6lyirsh61.png?width=1064&format=png&auto=webp&s=5b8cec520723c05673ec2215a50b2d8b660bf4e1)](https://preview.redd.it/kqcj6lyirsh61.png?width=1064&format=png&auto=webp&s=5b8cec520723c05673ec2215a50b2d8b660bf4e1)

Data Gathered and Image created by u/overTheCounterHustle

Notice if you will how the outstanding shares in XRT went down dramatically during the spike. That means the amount of shares that exist decreased. They chopped up shares to get the GME out. Then they bought GME back and created more and then shorted the hell out of it.

Like I said before about the boys on Wall Street: balls of steel. But while they have balls of steel, we have balls of diamond. I feel like an immovable object has just met an unstoppable force.

... and they were shorting the piss out of it the whole time.

Next on our list is this little gem...

[![r/GME - Serious Researchers Needed Now: I think I know What Happened](https://preview.redd.it/dhcfkktetsh61.png?width=2076&format=png&auto=webp&s=09e8a3d2b8b59bb02c0ae8d3da18e40b6f0dcec6)](https://preview.redd.it/dhcfkktetsh61.png?width=2076&format=png&auto=webp&s=09e8a3d2b8b59bb02c0ae8d3da18e40b6f0dcec6)

Sent to me by another redditor whose name I lost. Please contact me if you want credit for this find. Sorry about that, it gets confusing with so much going on.

Anyway, in case there was any doubt that the GME spike was indeed causing the ETF's that it is in to move with it. These are all ETF's with GME in them except for AMC at the top. Why does AMC behave the same way? We still don't know!

LINKS:

XRT is shorted 180%

<https://www.etfchannel.com/type/most-shorted-etfs/>

ETF's Hold 10.7 Million shares of GME

<https://www.etf.com/stock/GME>

What I'm looking into next is liquidity- 'If there's liquidity, it's not a short squeeze'

<https://sixfigureinvesting.com/2013/10/volatility-short-squeeze/>

Who would buy GME if XRT got squoze?

"...if the value of XRT started to significantly diverge from the value of the S&P retail stocks that compose the index (the net asset value or NAV)  then arbitrageurs would step in to provide liquidity.

In a short squeeze on XRT, where there aren't a lot of shares around for sale, its value would start rising above its NAV.  Once that gap becomes significant arbitragers would start buying the basket of stocks represented by the XRT and creating XRT shares to sell priced at a premium"

Article here:

<https://sixfigureinvesting.com/2010/09/short-squeeze-on-etf/>

The threshold data (failure to deliver) for Jan 15 - end of January will be available here, probably tuesday:

<https://www.sec.gov/data/foiadocsfailsdatahtm>

Someone sent this in Fizz stock also followed the trend. He posted more in the comment section:

<https://ibb.co/VSfZcsL>

As for the original questions:

Can a ETF get squoze? Yes, but they can make new shares fairly easily. But they need the underlying stocks to make them. In the case of XRT that underlying stock is GME.

Can a Hedgefund also act as an AP to an ETF? Yes, as in the example below that one of you found, but it doesn't matter because XRT allows shareholders to redeem their shares for the underlying stocks, so the HF wouldn't need to deal with the AP.

<https://www.thetradenews.com/citadel-securities-virtu-jp-morgan-bank-america-first-join-ice-etf-hub/>

Next Update we'll look at the theory about counterfeiting shares and all of that stuff. Until then let me leave you all with a big thank you for all the awards and for helping with research. Sorry I forgot some names. I'm glad you got something out of my work. Remember also that I don't know if GME will spike again for sure. But here's hoping it does and here's to all of you crazy awesome Apes and diamond hands out there:

[![r/GME - Serious Researchers Needed Now: I think I know What Happened](https://preview.redd.it/r9zqwv1jysh61.jpg?width=1200&format=pjpg&auto=webp&s=7a889f68bfe6e79565f405e7f5d98d34e17aa55f)](https://preview.redd.it/r9zqwv1jysh61.jpg?width=1200&format=pjpg&auto=webp&s=7a889f68bfe6e79565f405e7f5d98d34e17aa55f)

Battle of GameStop

check out my personal sub if you want it's called

[r/Shitposters_United](https://www.reddit.com/r/Shitposters_United/)

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UPDATE #3: I'm not saying anyone should buy sell or hold anything, but I thought this wasn't getting enough attention:

<https://www.reddit.com/r/WallStreetbetsELITE/comments/l78atg/i_have_a_workaround_xrt_is_an_etf_that_tracks/?utm_source=share&utm_medium=ios_app&utm_name=iossmf>

and this

<https://www.reddit.com/r/GME/comments/lkuarh/xrt_is_just_the_tip_of_the_gme_iceburg_dd/>

Now look at XRT's price chart and compare to GME. We know that XRT follows GME pretty well. But what happened after the drop? XRT stabilized and started going up. GME flat-lined around 50. I'm not saying the price of GME is being artificially suppressed. I'm just saying ...hmmm.

You know, XRT lost a lot of shares when someone bought a shit ton and redeemed them for the underlying stock to get the GME out of them. It wouldn't take much to.... I'm not saying that people should make the stock scarce to try to trigger a squeeze because that would be illegal to try to get people to do that. You shouldn't say that either.

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UPDATE #2: BOOM:

*"One possibility is that because XRT redemptions are delivered in-kind -- meaning that its shares are exchanged for the underlying stocks in the fund --investors are ditching the ETF to get their hands on hard-to-borrow GameStop shares. "*

[*https://www.bloomberg.com/news/articles/2021-01-29/the-gamestop-drama-just-cost-one-etf-almost-80-of-its-assets*](https://www.bloomberg.com/news/articles/2021-01-29/the-gamestop-drama-just-cost-one-etf-almost-80-of-its-assets)

To everyone who told me I was wrong about this, suck it. LOL (yes I still say LOL!)

Ok. For those that don't know redemption is when you give your share back to the company that issued it. XRT as it says in the Bloomberg article above will redeem it's shares by giving you the underlying stocks that make up the share. That's where the HF's got - I'm guessing half - of the shares they used to cover their GME fails. The other half they bought from us off the market. THIS MEANS THEY DIDN'T NEED THE AP TO DISSOLVE THE SHARES FOR THEM.

That mystery is solved. Now I need to look at the outstanding shares of XRT and see what happened Jan 24th - Feb 3rd. If shares were redeemed, outstanding shares should have shrunken like crazy.Also, the HF's no longer have these GME shares they pasted back together from XRT shares. Why? They gave them to the people they had already sold them to when they shorted GME so bad that they wound up on the Threshold list for 39 days in a row. They got out of that mess, for the most part, only to get right back into it by shorting XRT to the point where it's now stuck on the threshold list. With time ticking on that situation, they are going to have to come up with the XRT shares to cover it. Someone on here posted that XRT is over 100% shorted itself. They have to buy the GME stocks back or from someone else to paste XRT shares back together to cover the fails there which have been going on since Jan 29th.

Thanks to everyone for your research, the article above was found by one of you but I can't find you comment right now or I'd give you credit.

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*****EVERYONE READ THIS*****

Do not tell anyone on this thread to buy, sell, or hold.

Do not ask anyone if you should buy, sell, or hold.

If you do you may be getting unwanted attention from the SEC for trying to manipulate the price of a stock. We are not here to try to manipulate the price of GME, we are here to try to determine if there is still a possibility that another squeeze is coming and what the facts are surrounding that possibility. The SEC may be out for blood on this one so don't give them anything that they can say. Esp on a thread that I started. Read the following in full:

7\. Will close-out purchases required by Regulation SHO drive up a security's price?

Close-out purchases of stock will not necessarily drive up prices of such stocks. One of the primary purposes of Regulation SHO is to clean up open fail positions, but not to cause short squeezes. The term "short squeeze" refers to the pressure on short sellers to cover their positions as a result of sharp price increases or difficulty in borrowing the security the sellers are short. The rush by short sellers to cover produces additional upward pressure on the price of the stock, which then can cause an even greater squeeze. *Although some short squeezes may occur naturally in the market, a scheme to manipulate the price or availability of stock in order to cause a short squeeze is illegal.*

Read this article (it's short):

<https://www.marketwatch.com/story/is-gamestop-stock-being-manipulated-by-social-media-users-or-is-it-free-speech-legal-experts-weigh-in-11611636278>

Any false information I have stated in any and all posts on this subject were mistakes due to the fact that I am a total amateur at trading stocks. I'm doing the best I can as are most of the people here. We are learning all of this on the fly. So guys and gals, please word your posts carefully.

Update #2 coming later today (Monday, Feb 15th)

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[UPDATE #1: Wow! You guys are awesome! So much great information. Thanks for posting links to where you got info from, it saves us all a lot of time. I've got tons of stuff to research now and lots of good leads to follow thanks to you guys.

As of right now, we have clarified a number of facts about the current situation. We have also discovered a few new mysteries to unravel. There appear to be several unrelated stocks that showed the exact same spike as GME at the exact same time. We expected the ETF's to do that, but these are not ETF's with GME in them. They seem to have nothing to do with GME at all!

In addition, we have a debate going on over a few key points:

1.  Can Hedgefunds act as AP's for ETF's? I don't know. I know banks can.

2.  Can an ETF get short squoze? We know they can just issue more shares and liquidate, but is there any way it could happen? Also, on this point it isn't the fund itself or it's AP's that have to deliver. It's whoever is late on delivering the shorts to their customer. Meaning in many cases a hedgefund. So issuing more shares might dilute the price as a squeeze is happening, but why would the ETF give a shit? They didn't short the stock, some hedgefund did.

3.  Some are saying that the shorts being covered could have been faked. This is a very interesting idea. Shorting the ETF's and then gong long on the rest of the equities in the fund to nullify the effect of the short on those while keeping the effect of the target stock being shorted. How could this satisfy the fail to delivers for the target stock? I don't totally understand this theory yet but it's late and I have to sleep. I'll post another update tomorrow.

Lastly, READ THIS IF NOTHING ELSE:

THIS IS JUST A THEORY AT THIS POINT

SOME STUFF I SAY MAY OR WILL BE SLIGHTLY WRONG UNTIL THE DETAILS ARE FIGURED OUT

DO NOT MAKE A MOVE IN THE MARKET YET BASED ON THIS THEORY (I'd feel bad if you lost money before we had a solid thing figured out completely)

BE NICE TO EACH OTHER- WE ARE ALL JUST TRYING TO FIGURE THIS OUT TOGETHER

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Original Post:

I'm gonna make this quick. If you don't know what I"m talking about please research it and then reread this post.

Okay, we know GME came off the Threshold list on Feb 3rd. That means they covered almost all of their FTD's (fail to deliver). Many of these they bought from us on the open market at high prices, however many people have speculated that it doesn't seem to be enough. We know they stopped many of us from buying and that appears that it may have been collusion to make sure there were enough shares available so that Melvin and friends could buy them to deliver to those they already sold shares they didn't have to. But was that even 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 had to buy at the higher prices and that is the main reason, along with the hype, that the stock price spiked.

Now, we are all hoping that there will be another spike, which would only be true if the short sellers were back in the same situation they were before. Many of us speculate that somehow they found a way to just kick the can down the road, meaning they put off the squeeze to a future date. But the DD on this is lacking.

Also, we have noticed that the price chart for AMC looks identical to the chart for GME, other than the price. No ne can figure out why other than to speculate that it;s just because many people who buy/sell GME are also buying and selling AMC at the same time. This may or may not be true or may be partially true. We don't know for sure.

Now, if they did kick the can down the road somehow, then where did they get the shares to cover? Enter ETF's. There are several ETF's that have GME as part of their portfolio. I have only looked at one. I need you guys to check out the other ones because I am short on time. I checked out a fund whose ticker is XRT. Their chart looks exactly like the GME and AMC chart! And GME is one of their main stocks that make up part of their fund. Coincidence?

Now, there is a thing called an AP which means an Authorized Participant.

<https://www.investopedia.com/terms/a/authorizedparticipant.asp>

A ETF's AP is allowed to buy the underlying stocks that make up the ETF and then create new shares of that ETF, but they are also allowed to take existing shares of the ETF and liquidate them back into their original stocks. Read this:

<https://jacobslevycenter.wharton.upenn.edu/wp-content/uploads/2018/08/ETF-Short-Interest-and-Failures-to-Deliver.pdf>

Now, XRT went ON the threshold list on January [edit: 29th] and has remained there to this very day! That is the same day that the hedgefunds supposedly covered most of their short positions and the GME spike started to drop as well as about the same time the brokers stopped letting us buy!

We need to know what happened to the XRT outstanding shares between five days before the 26/27 of January and up to today. We also need to know if the short volume increased during that time and any other relevant information that might show whether or not the Hedgefunds used the ETF's to get the shares they needed to cover their FTD's. If so, they borrowed them from the ETF's, which explains why XRT is now on the threshold list right about when GME came off of it. For context there are thousands of stocks, yet only about 20 are ever on the threshold list at any given day. What are the odds, considering the relationship between XRT and GME, that one would go ON the list right bou tthe same time the other came OFF the list?

My theory is that the HF's used the ETF's that had shares of GME to cover their failed short positions so that GME would come off the threshold list. This would make us all think that the opportunity is over, however the ETF's involved are now in the exact same position that GME was in just before the spike. They just moved the crisis from one place to another.

Please post any and only legit research on this and provide links. I will do the same as I continue to research this issue. Thanks.

Also, I am not a professional when it comes to stocks. I am a rank amateur who is just trying to figure this all out. I am not advocating any action on the part of anyone else when it comes to buying, selling, or holding stocks. You are responsible for your own actions in the stock market.
