22 KiB
We all have to start somewhere.
| Author | Source |
|---|---|
| u/Bye_Triangle |
Please, do not think of this F.A.Q. as a substitute for doing your own research. This is not the whole story, this is only meant to serve as a jumping-off point.
What are you even talking about?
HF - Hedge Funds - often used to refer to the bad guys in general.
SHF- Short Hedge Funds - Used to delineate the hedge funds we are against, from our allies
LW - Long Whale - Allied hedge funds or large investors that are also buying/holding GME
DD - Due Diligence, Deep Dive - Research and theories based on that research
TA - Technical Analysis - Graph and Number Data analysis
MOASS - Mother Of All Short Squeezes - The biggest Short Squeeze ever
FUD - Fear, Uncertainty, Doubt -Refers to calculated attacks on morale and individuals
DFV - u/DeepFuckingValue, TheRoaringKitty - Keith Gill, Retail Investor, not a cat
APE - How the most users here refer to one another
HFT - High-Frequency Trading - A method of trading huge volumes in fractions of a second.
OTC - Over the Counter - A decentralized market where trading between two parties can take place without the use of a stock exchange.
Is the squeeze Squoze?
No
Should I invest?
That is entirely up to you. This is and has always been a high-risk play. Do not invest money you cannot afford to lose. There is no investment advice here.
Am I too late?
Again, the answer is up to you. The short sellers likely need every share to cover their positions. If you want to buy one share, but haven't because it seems like not enough-- Please remember that every share matters, the float isn't very large to begin with.
When is the squeeze?
Nobody knows, and nobody will know. Unfortunately, because of all the variables and moving parts, it is literally impossible to predict. It has become apparent that building up hype over specific dates can be used against us. We have in the past seen dates that everyone built hype around only to have them pass and enthusiasm wane within our subreddit. That having been said, we ask that people stop asking when this will happen. Furthermore, please take any dates you do see on r/Superstonk with a grain of salt.
Why does holding do anything?
They need your shares to cover their short positions! They got greedy. Thinking GameStop would fail, the short sellers started Naked Shorting the stock. Long story short they created synthetic stocks with their special privileges as Market Makers. But they can't cover a short with a synthetic share. So because of the Naked Shorting, the Short Sellers, multiple large greedy money managers, and Hedge Funds need a total number of shares greater than the number available to purchase. THEY NEED EVERY SHARE, EVEN YOURS CONAN
aRe YoU GuYs MaNipuLatIng THe MaRKeT?!
To be extremely clear, as there is a lot of misinformation flying around. No, we are not. This subreddit is in no way a form of market manipulation. We aren't the ones manipulating the market here. The purpose of r/Superstonk is not to "Pump and Dump" the stock, despite what some media sources will tell you. Instead, r/Superstonk is just a community of individuals investing in the same stock separately. Furthermore, any use of the words "we" or "us" in any posts or comments is not indicative of manipulation. The use of such words that suggest we are a group only serve to refer to the users that frequent this PUBLIC community (Often referred to as "Apes").
r/Superstonk is a place for sharing, PUBLICLY AVAILABLE INFO, as well as theories and excitement. In this community you will mainly find:
-Amazing theories from people who spend hours pouring over data
-High-quality Technical Analysis, the likes of which would be super expensive to get otherwise
-Some really great memes
-The actual truth about the incredibly heinous market manipulation plaguing GME.
How are these crazy high share prices that people cite, possible? 100k 500k etc.
No one knows how high the squeeze could take the stock price. The best rational reasoning says that these numbers are possible through the laws of supply and demand. Furthermore, it is likely that the Short Percentage is a lot higher than reported, with many suggesting that the short-sellers, cumulatively, need more than 100% of the float to cover.
What is a Short?
A Short position is fairly simple to understand. When someone thinks a company will do poorly or is bound to fail, they can establish a short position on said company's stock. To do that one must borrow shares from someone willing to lend them, and then sell those borrowed shares. Then you put that money into your piggy bank for later. Assuming all goes according to plan, the stock goes down like you thought, when the stock drops to the price you are happy with you then buy back the shares you borrowed. You grab the money you sold them for and buy the shares, you give them back to the person you borrowed from and make off with the leftover money.
So then what is a Short Squeeze?
The Short Squeeze is a fairly rare financial phenomenon. Basically, when a bunch of institutions think a stock will fail, sometimes they will all pile on the short positions in the same place. More often than not, they probably make a lot of money from this tactic. But occasionally they will get noticed and if everything lines up just right, this "Short Squeeze" can occur. Usually triggered by a catalyst of some sort, Short Squeezes usually happen when the stock doesn't go down but instead goes way, way up.
When it goes high enough that the Short Sellers' other assets are no longer larger than the potential loss they are risking in the stock they shorted, they will get Margin Called. At that point, they are told to buy the stock back at whatever the price because the Clearing House doesn't want to deal with the elevated risk. Once you can't afford the risk you're out. This margin call, theoretically, only has to hit one institution before the dominos start falling. The Margin Call causes increased buying, increased buying sends the price up, the price going up means more Margin Calls, and so on.
Why are people saying that the short interest could be more than 100%?
Despite all major reporters of short interest having numbers much lower than 100% on their sites, it is unrealistic that the short interest is as low as they claim. Here's why:
-The industry is largely self-reported, meaning that HF's can choose to report lower numbers if it benefits them. While this practice is illegal, it is only punished with a fine. This fine is often much smaller than the potential loss or gain, the HF may experience if the true data were to be reported. This is fine that Citadel LLC. (One of the bigger HFs shorting GME) has had to pay multiple times in the past, so there is precedence.
-It was discovered by some Apes that there was an abnormal increase in short interest in most of the ETFs with GME inside them. The increase coincided with the spike in January and following that, the media started pushing the "Shorts covered" narrative that was everywhere last month. You can read up on the ETF Short Interest info in the DDs here. To summarize, the short sellers of GME essentially disguised some of their position with shares of Exchange Traded Funds (ETF). By establishing a short position on the ETF and then establishing long positions in every stock in there except GME you basically cancel out your short position in the ETF, leaving only a short position in GME. *Important Note: This does not mean there will be a short squeeze on the ETFs! An ETF cannot really be the subject of a short squeeze due to the mechanics behind them *
-Synthetic long positions could be used to disguise their short positions as well, the mechanisms behind this practice utilize the options markets and could explain some of the crazy options activity that we have seen in GameStop the last few months.
Why Gamestop?
Short Squeezes can happen anywhere there is high Short interest. Gamestop however is a special case (Hence the use of the term/ acronym, MOASS). Gamestop's Short Sellers got extra greedy in this case. They were sure that Gamestop was going to die in the wake of the pandemic. So sure, in fact, that they began Naked Shorting the stock like crazy. Had Gamestop failed and went under, they would have never had to cover all those positions. They would have just went on their way, cash in hand, off to short another company into the ground...
Suddenly a glimmer of hope began to emerge for Gamestop, this hope in the form of Ryan Cohen, an "Activist Investor'' and CoFounder/CEO of Chewy.com. Finding success in past endeavors, people believe Ryan Cohen, and his plan to turn Gamestop around spell out the end of the line for Short Sellers. Around the same time, DFV started sharing his Bullish thesis on Gamestop's turnaround. After getting hate for a long time for his "Outlandish Theories", people in the Reddit Forum r/Wallstreetbets started to really take notice, now believing that DFV's theories were right all along.
To explain where we are now is difficult, as one could realize from a cursory glance the story is complicated. To summarize as best I can: The Short Sellers seem to have disguised their short position, even perhaps doubling down. They then manipulated the media to spread the word that Gamestop was dead, the squeeze was squoze. While at the same time they employed the use of social engineering to slowly depress the positive sentiment for the stock on Reddit and elsewhere. Recently, it seems that media sentiment is slowly changing as it becomes too obvious for the media to ignore that Gamestop is not even close to dead. The media sentiment changing also seems to coincide with some large investors, of unknown identity, hopping on board the rocket with massive long positions being opened. Many see these large investors as the last confirmation they need that Gamestop is going to the moon. Regardless of the squeeze, I, personally, like the stock.
What is Naked Shorting?
Just like Shorting, but with more illegality! Through archaic loopholes in the laws governing the financial industry, some individuals participate in Short Selling without actually having the shares. This essentially creates a counterfeit share. When this is done, the short-sellers are taking on a lot of risk, but the payoff can be grand. It's not easy to actually catch the naked short-sellers red-handed but some look to the Failure-to-Deliver data to shed some light on it. Naked shorting is also how it's possible there is more than 100% of the shares out there at the moment.
Who is Ryan Cohen?
Ryan Cohen is on the board Chairman of the board for Gamestop, holding the most shares of any individual (9,000,000). Cohen is also head of the Strategic Planning and Capital Allocation Committee for Gamestop, essentially putting him at the helm of the company's pivot. After Cohen's past successful venture with chewy.com, and seeing the people that he is bringing to the table at Gamestop, there seems to be a very clear and profitable path forward for this company. In November of 2020, Cohen released an open letter stating how he believes the Gamestop board and CEO had been failing at their jobs, he goes on to lay out a bit about how they could do better with Gamestop as a company.
Ryan Cohen clearly believes in Gamestop, to the point of announcing that he will be taking equity as compensation. In fact, as of writing this all of the new Gamestop board members are going to be taking equity as compensation. This is seen as an incredibly bullish sign of the company's future success.
Catalyst? What do you mean and why is it important?
Essentially the catalyst is the spark that lights the fire. This catalyst could be anything that triggers buzz around Gamestop (the company) or news about the stocks. It is unknown exactly what will be the event that triggers the MOASS. What is clear, is that the situation is very unstable and really anything can cause major volitility. This Subreddit is full of theories as to what the catalyst will be, I would highly recommend reading them. Below is a shortlist of some of the potential catalysts people are speculating about:
-A Stock Split, or some similar move from Gamestop that recalls shares
-Gamma Squeeze
-Gamestop's Q1 Earnings Call
-Some speculate Gary Gensler (Newly appointed head of the SEC), may make some move that sets things in motion
-DTCC rule changes taking effect
-Appointment of a new CEO
What is a Shill and why do people keep calling me that?
One of the MANY things that the HFs have tried to do to curb-stomp retail investors, is flooding our public communities with Reddit accounts (Some bot-accounts and some actual people who seem to have been paid) purposefully spreading negative sentiment.Though it sounds like a conspiracy, there is plenty of proof. These accounts have been seen all over not just Reddit, but also Youtube, Twitter, etc. Not just conventional social media though also places with message-boards like MarketWatch, Yahoo finance, WeBull, basically anywhere you could talk about GME. The term "Shill" is a blanket term for those accounts, be them bots or people.
In the past, these "Shills" have utilized many different approaches to spreading Fear Uncertainty, and/or Doubt (FUD) about the stock and the company. One of these beings, flooding the subreddits with super basic questions, that lacked any substance at all. This was seemingly in an effort to give the illusion that if you were still holding GME you didn't know what you were doing, because when you looked around you were surrounded by people who didn't have a clue. This, along with most of their other attempts to shake retail investor faith, has failed.
You may have been called a Shill for one of a number of reasons. This community is very inclusive and open to everyone, but because of the blatant attacks this forum has suffered a lot of people are understandably paranoid. (Myself included). Please, unless you really are a shill, don't take it personally.
What is a "Short Attack" (aka "Short and Distort")?
The Short and Distort is a time-honored tradition of illegal market manipulators. First, they short the stock, then they distort the image of the company. This is a practice whereby the Short-HFs actively suppress the price, most of the time through the spread of bearish misinformation about the company in question or the technicals of the stock.
We are seeing this in Gamestop in the form of FUD campaigns and Media Manipulation.
Shill-Based-FUD and how to spot it:
First of all, it is incredibly important to note your potential biases when determining if someone is just a shill trying to spread FUD. Not all FUD is invalid, someone may bring up a solid point against an otherwise great DD, and that could scare you. Remember that just because you do not like what someone is saying, doesn't make it invalid. It is important users here work with constructive criticism to refine their theories.
Instead of shooting this person down as a shill, ask yourself the following: Are they making a valid point? Is it backed up with evidence? Have I fact-checked this evidence?
If you answered no, to these questions, a great next step is to check their post history, Here are some things to look for: Are they constantly posting negative-sentiment, as if they have something to gain? Do their posts/ comments sound coherent? Are those posts repeating the same or slightly different things (copy/pasted)?
Since this forum and others where GME is discussed are public, the ones behind this petty attack can see what we say and how we react to their ILLEGAL MANIPULATION. This means that since this has started (back in January) these Shills have gotten smarter, and less obvious. They become easier to spot over time, don't worry. When you spot a Shill, report it to your local Mods and downvote the post/comment.
New FUD tactics, What to look out for:
The tactics that have been used on this community are absolutely despicable. At first, it was pretty benign, but with the recent attacks on individuals in this sub, it has crossed a line. If these individuals happen to be reading this, I hope you understand how pathetic you are. I feel it is important to remember that these actions being taken against us only serve to prove that there is more to this situation than meets the eye.
Unfortunately, they are always finding new ways to fuck with us. With that said, here are some noteworthy ones as of March 28:
-Spreading FUD about users in r/gme and r/Superstonk, more specifically, users that post some of the most viewed DD.
-Bringing into question the integrity of the Mod Team. With the Mods at r/wallstreetbets being accused of being compromised, and some turbulence in r/gme this FUD was easy to see coming. Since there was already precedence for it, the shills believe it an easy task to convince the community that their subreddits aren't safe.
-Fake DD. This can mean a few things, there are different ways a 'Fake DD' is done. One type is as follows, The post seems to start out with a positive sentiment but takes a negative turn and ultimately doesn't disseminate anything of value. Another type, this one being far less difficult (and thus likely more common) A DD that comes to a negatively skewed conclusion through the use of lies and false data. This Fake DD can be combated quite easily, thankfully. All you have to do is read the DD, fact-check some things, and read some comments, then you can upvote it. Wildly upvoting every DD is a surefire way to let FUD slip through the cracks and get to the top, that's where it can do the most damage.
How do I, as a retail investor, stand a chance against the Hedge Funds?
There has been much debate over how the retail investors cumulatively stack up in terms of shares held. With all sorts of numbers floating around, it is impossible to know just how large a slice of this pie we are hodling (holding). I recommend reading some of the many DDs on this though. Regardless of the exact percentage, it seems, based on what data we do have, that the narrative of retail investors being on the sidelines of what is actually a Hedge Fund vs. Hedge Fund Battle...
is false. Perhaps, prior to January, that narrative may have been more accurate, but since then retail investors have been buying on every single dip in the price... That's more than two whole months of buying-the-dip. Now, I will not speculate on numbers here, if you want to know more you will have to read the DDs on that.
Any use of the words "we" or "us" is not evidence of manipulation. We are not the ones manipulating the market. The use of words that suggest we are a group only references this community of people, who are individuals investing in the same stock but as individual retail investors. This community is not a place to organize or manipulate markets and it never will be. It is a place for sharing publicly available information and analyzing/studying that information as a community in a way that benefits everyone fairly and safely.
This is updated almost every week. If you have suggestions for additions to the F.A.Q, please message u/Bye_Triangle