Ford Needs Cash. Might the Auto Dealer Lose Value Enough Trigger Margin Calls?
Ok, first ever DD... here goes.
Edit: 962%!
TL;DR: Supply shortage of chips has Ford in a precarious position. They sold a bunch of bonds TODAY, possible to make their Q2 books look good. A bunch of hedges piled into Ford in Q1, and OBV says they are still there. Citadel increased their holdings in Ford 962% over the last quarter. Me thinks that they are in line to be the victim of a classic Citadel P&D. The stock looks like it was potentially pumped in June, but we haven't seen any major exits yet. To me, Ford looks like they are about to go for a downward ride in Q2, and hedge funds could be left holding the bag, potentially leading to margin calls.
I was scrolling about on Twitter this afternoon and this particular set of tweets caught my eye.
Nothing crazy, I thought to myself.
Then I saw this post, and wanted to check it out the NYSE for myself. I didn't see too much as to anything pertaining to that post, but look what I found on the NYSE site, published today:
Source: https://www.nyse.com/trader-update/history#110000364312
Ford is cashing in bonds with a maturity date of a couple years from now. That signals to me that they need cash. Makes sense I suppose, if they are to expect decreased output. But wouldn't that signal to the public that the company is in for a downturn? Let's check out their stock.
Say whaaat, they are on a bit of a tear. Well, I suppose all this news is coming out today. Ok, so let's try and tie this back to GME.
So who owns Ford? Let's take a look
Look at all those firms, which is to be expected I suppose. What is interesting is that as of Q1 all of their ownership history spiked. Fairly hard I might add. I am very interested to see what their Q2 data is on ownership, because, as the technicals/OBV show, no one is offloading the stock... yet.
Edit: How am I just realizing this now? Citadel increased their position in F 962%! NINE HUNDRED AND SIXTY TWO! That signals to me that Ford is going to end up as another victim of one of their pump and dumps.
So, Ford is suffering a chip shortage and will likely have reduced output/gross proceeds. On the same day that is announced so too do they redeem a bunch of bonds over the NYSE for what I can only assume is quick cash to make their books look nice for Q2. On the flip side it appears that a LOT of hedges piled into the stock in Q1, including our boy Kenny who's holdings accounted for .36 percent of Citadel's total. OBV shows us that it is likely that no one is dumping Ford, but the signs are there that they are about to fall - pretty hard if I had to guess. That spike in late June does look like a pump though.
All in all, I think Ford is showing signs that they are about to be in some deep water due to lack of supply and rising car costs. If my hunch is right I think we see them dip pretty heavily into the next quarter unless chip supply turns around. With all the hedge funds piled into the motor company, it's possible that a large enough dip would be enough to cook their books for a potential margin call - which, as we all know, could be the domino that sets off the chain reaction to a GME rocket launch.
Posted Jun 30, 2021, 4:54 PM UTC · edited