GameStop Squeeze May Collapse Markets

February 25, 2021

Damyan

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GameStop Stock Up 100% In One Day

GameStop stock is up 100% yesterday and another 50% today pre-market hours. This shows us that the short squeeze everyone thought happened actually didn’t. And it also disproves that the “Hype” is gone. Well, it is not. Millions of people are buying GameStop and AMC stock again. And this time they are armed with even more knowledge than before. The retail investor has learned many lessons from the last short squeeze, which was actually a Gamma squeeze. Gamma squeezes happen when trading platforms need to hedge your GME longs with shorts. Further increasing the short volume of the stock.

Dirty Wall Street tricks

The last time GameStop almost got short squeezed Melvin Capital (a huge hedge-fund) lost billions of dollars in a couple of days. And it had to get bailed out by a friend called Citadel (another even bigger hedge-fund). But that did not stop everyone from continuing to buy GameStop stock. And the price continued to rise higher and higher. The billionaires tried every dirty trick in the book. Short ladder attacks (selling 100 shares at lower and lower prices to each other), while restricting the buying of the stock. That was achieved by hicking the prices for clearing the transactions. Requiring brokers like Robinhood to pay $3 Billion just to clear the orders. Even regulators said they are investigating the whole drama. And started investigating the little guy, not their sugar daddies in Wall Street. But even after all this manipulation and stock is still going up. 

GameStop May Have over 400% of its float short.

The float is the number of available shares to be traded. Most shares are held and “locked”. According to Reddit user Corrode1024 for GameStop, the numbers are:

  • Insider Ownership: 23 704 787
  • Institutions: 151 000 000
  • Funds: 40 000 000
  • Retail: 38 595 000
  • Float: 50 000 000
  • Synthetic + Reported Estimated Short: 219 091 451
  • Percentage of Shorts to the Float: 432.56%

Furthermore, consider what Interactive Brokers Chairman Thomas Peterffy had to say last time GameStop stock started to squeeze on a CNBC interview. He said that if the buying of the stock was not “regulated” (i.e manipulated) brokers would have been obliged to deliver 270 Million shares of the stock. That makes the percentage of the float short even bigger at 540%! This tells us the stock is still HEAVILY shorted. It also tells us that another Gamma squeeze may actually trigger the infinity squeeze.

Triggering the biggest short squeeze ever

This time retail investors might actually be able to squeeze the hedge-funds. We can see that Wall Streets’ dirty tactics work for a short period of time. And now a lot of people who own the stock also know that making a sell limit order and locking your shares may trigger the squeeze. When shares are waiting to be sold at a market sell order they are locked. Meaning brokers cannot give these shares to be shorted. Making the float even smaller. And also raising the chance for the squeeze to happen. The Reddit user thabat ran an AI simulation and it predicted the price of GameStop stock to SHOOT up to $130 000. At its peak, if the infinity squeeze actually happens.

Market Collapse?

In the event that the infinity squeeze actually happens this could spell terrible news for everyone. We do not know for sure that if one big firm fails that it might trigger all kinds of dominoes to fall. All of the market makers, brokers, fiduciaries, exchanges, clearinghouses are linked together. Then again this might not be an issue at all. And that this might very well be a plot to discourage the buying of GameStop. What we know for sure is that the market is not free or fair. And that is why I am a fan and support decentralized exchanges and Bitcoin. Wall Street is like a rich oil baron with all the gold. He can do whatever he wants. Decentralized exchanges fix that. Total transparency in the system. And the system is not based on trust. It’s based on maths. Which are universal truths. The best-decentralized exchange is Binance. Scan the code below or press it and get 5% kickback commission FOR LIFE! If you don’t use it and register from the website you won’t receive a commission.

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