GME - It's all coming together
Apes, I come to you as a fellow primate with excellent news: my wife finally left me. Now I have her boyfriend all to myself.
Before I reading, I just want to express that predictions and dates should not be taken as absolute and that these are just my opinions on what COULD be coming. I am also well aware that correlation does not equal causation and that these correlations could be coincidences, so please don't comment that, these are just my thoughts based on research that I've done. I've done many posts on GME and these are all my personal opinions based on my research, so do not take them as fact. This is not financial advice, I am not a financial advisor.
There's been an onslaught of news regarding GME in the past few weeks and days, and I believe that there is more to come and that because of that the squeeze is inevitable and in the near future.
The news:
- Amazon + Chewey Execs being appointed
- RC being named god of the board
- GME announcing the search for new C.E.O.
- GME paying off senior notes (today)
- The announcement of GME's right/intention to sell 3.5M shares or $1B in value (this may not seem important but I'll explain why it's crucial later)
- The announcement of the definitive date for the annual meeting (6/9 lmao)
Why it matters:
The past two weeks have been bombarded with news from GME, and almost all of it deals with leadership or the transformation. I believe that this bombardment of news is extremely intentional. The reason that I believe this is because of their announcement of the right to sell those shares. When GME made this announcement, the stock was at $190. GME knew full and well that anytime an announcement like this happens, the market would react negatively to the stock, and, because GME is so volatile and the victim of abusive shorting, that negative reaction could've been huge. Despite knowing this, they decided not to sell at that moment. I deduce from that lack of action that GME believes that the stock will go WELL ABOVE that $190 level sometime in the future because if they really wanted to capture the value of the stock at $190, they would've just sold the shares instead of reserving the right to do so. With that being said, I believe that they are actively trying to set up the stock for a massive run that could potentially trigger a squeeze so that they can capitalize on a price that is well above $190. If this wasn't their plan, then it made zero sense that they didn't just sell at $190 knowing that the announcement would tank the stock, which it did. Finally, when almost every analyst (boomers) says that GME is grossly overvalued, it is irresponsible of you as a corporation not to take advantage of that extremely elevated share price unless.... you have reason to believe that it will soon be substantially higher. Therefore, I believe that the recent slew of announcements is their attempt to make that happen and that we should see more announcements in the near future because they are probably well aware that being lax about this could lead to decreased interest in the stock.
To add to this, GME has repeatedly warned in their S.E.C. filings that suspect shorting activity on the stock could cause it to squeeze (they have said this twice since the original squeeze). This, to me, seems that they are covering themselves so that they can't get sued for market manipulation if it does indeed squeeze. What's even more interesting about this is that maybe they have data that is not available to apes and other primates that suggests that the shorting activity is even more abusive than any of us thought (again just a theory).
Catalyst
But what could the next announcement be? It's very difficult to actually know. The paying off of the senior notes caught me by surprise but isn't news that would actually propel the stock to the stratosphere. I believe that their next catalyst will be something about either the C.E.O. position or the digital transformation. GME could very well announce Cohen as the C.E.O., which would undoubtedly send the stock to the stratosphere. They could also announce something about an acquisition or something related to their shift to e-commerce. Again, this is simply conjecture, but I believe that GME is going to make some kind of catalyst announcement soon to push up the price. However, the biggest and most crucial catalyst could be a share recall. First, I want to stress that GME itself cannot recall shares, only individual investors can do that. If only there was an investor with a ton of shares in GME who has an active interest in making the stock go higher and has tweeted cryptic messages about hating shorts and bears... oh wait. If Cohen or another whale with a high stake in GME announces a share recall, that could be the ultimate catalyst for us. Or, if the hiring of a new executive/board member requires a vote, an activist could do what Hestia did last year and recommend that all shareholders recall their shares (see my previous DD on that).
Personally, I thought that the Cohen news would propel us to the moon, but I guess not. Maybe that shows more proof that shorts are in really deep.
Timing
The timing on the possible above-mentioned catalyst could not be more perfect. First, our lord and savior Mr. Gill's calls expire this Friday. At the same time, GME is forming what many are calling the mother of all wedges on extremely low volume (pictured below). The apex of the wedge should be this Thursday or Friday but could get pushed back to sometime next week if we still trade sideways. As many of you know, the options volume for this Friday is also through the roof as most of GME's monthly options are. What I'm hoping for is that GME announces some kind of catalyst in the coming week that will make a whale who is not invested in GME think "wow the stock is consolidating in this giant wedge pattern and is relatively cheap... time for some chaos." Finally, we have the 4/20 (lmao) deadline for shares to be recalled ahead of the annual meeting. I have trouble believing that GME is not going to do something before that deadline to trigger a price jump because, as I said previously, they have a vested interest in getting this above $190.
Here's the mother of all wedges that is actually forming with the mother of all cup and handles (yeah I know the cup and handle might be a stretch):
Finally, I also said in a previous post that GME is correlated extremely closely to the VIX. Many have said that it is inversely correlated with SPY, which seems to be true, but it is even more directly correlated with the VIX. This leads me to believe that GME does not move when the market is bad, but GME moves when the market is volatile (which usually happens when the market is bad). And, oh would you look at that, SPY is at $412 and is overbought and the VIX is at $16 (pre-pandemic levels). Looks like the market is thirsty for some nice volatility. For more on this, I encourage you to read "the everything short" post, which provides a much more in-depth analysis of how the market could crash and how GME relates to that.
Here are the charts. The first one is VIX and the second is SPY (both are the purple lines), as you can see, the VIX lines up extremely similarly with GME and SPY seems to be inverse to GME. This shows that GME does best when conditions are volatile or that GME creates volatile market conditions. As stated previously, the market is very overbought right now and there is very little volatility, so GME may soon be primed to change that or benefit from a change. The thing to get from this is that, based on GME's relationship to SPY and VIX, this is another indication that GME is in the perfect position to have a breakout as SPY is overbought and VIX is extremely low:
Quick Note on Short interest
Just wanted to give my thoughts on the GME short interest. As you all know there are tons of different numbers on GME short interest. Most boomer websites say it's anywhere between 19%-50% which is still extremely high. Most apes say that it's over 100% at minimum. I personally believe that websites are correct because the data is being altered through ETF shorting, naked shorting, and synthetic longs (see other posts for more on this). Therefore, I believe that the true short interest is over 100%. It makes no sense that GME's borrow rate on iborrowdesk is below 2% with short interest being able 20% and available shares getting to below 100 at one point today. Also, based purely on logic, it doesn't make sense that if every boomer analyst thinks GME is grossly overvalued that they wouldn't short it, so there is no way that GME's short interest is anything below 50%. Therefore, I believe that they are indeed abusively shorting it but are using the above tactics in order to manipulate the data so that the true short interest isn't shown so that regulators and the media don't start getting suspicious.
Conclusion
So, we have technicals lining up very nicely, a company with a vested interest in seeing the stock soar right now, a plethora of potential catalysts, a definitive date for when shares would need to be recalled, abusive shorting, a failure to deliver cycle, an insanely volatile stock that loves good news, a market that is thirsty for some volatility, and oh year one more thing.... some damn primates that refuse to sell. Stay strong, apes.
Posted Apr 13, 2021, 10:24 PM UTC · edited