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Welcome back you Degenerates!! https://i.redd.it/syiy7eryyhpc1.gif Oh Hai there!!I’m more pumped than ever and I’m about to bring you on a journey that has me scraping around my couch for pennies to put together to buy more. Let me explain!! *(I’ll just start with I’m a dumb crayon eating former Marine who is not qualified to wipe his own butt, let alone talk about the markets. Blah Blah Blah, Not Financial Advice but the ramblings of someone been here for over 84 years)*** I post this chart because the right half of this chart is how some of you have been feeling. It’s been 84 years!! Not me because I’ve been watching GME for a LONG time now. I’ve seen things on GME that I’ve never seen on any other stock. I have a crack of daylight for some of you. https://i.redd.it/s2y8pj0ndipc1.gif History lesson:I feel like Retail on here has gotten a lot of education since the sneeze but I don’t think a friendly reminder of the recent history of GME is a bad thing. So let’s start with WHY GameStop was targeted by shorts. ————————- GameStop was overleveraged, extended, losing cash, and losing Revenue with apparently digital gaming to be the nail in the coffin. Then COVID happened. It’s core business was completely eroding away and nobody at the company seemed to be doing anything about stopping the bleeding…. GameStop had people with ties to private equity on the board and it was supposed to just be the next Toys R Us. A company which may have been able to survive, if they didn’t overextend themselves and take out massive loans etc. Aka doing stuff the wrong way. GameStop was well on the way to being the next one. The “Meme Stock” basket was real and targeted. However, GME was always the real issue for the shorts. They weren’t as bad off as the others in terms of debt. ———————————————————— Dr. Burry (The Short Squeeze) was in on GameStop and was critical to this story. He then started noticing some strange things. People might not remember this but Dr. Burry actually encouraged the board to do a share buyback lowering the amount of available shares. While this happened, he noticed that when he went to sell, it took them a VERY long time to locate his shares. While he did exit before GME popped off. Him lowering the float on a very highly shorted stock, set the stage for things to happen. DFV recognized (As we learned later, he was actually a professional and did understand how to look at stocks), that no stock should have been shorted that highly that GME had been. He invested and put out his thesis. I don’t think he really knew how big this all would get. The lower the price got, the more he noticed how greedy these shorts were. Short and Distort. Short squeezes normally occur with the big guys. Not with the poors like us. And in fairness, retail didn’t really cause a squeeze. There were some Hedge Funds who quietly joined in on squeezing Melvin and Citron. They were the ones loading options chains and putting a ton of pressure on that small float because MM were in a pinch. There weren’t enough shares. Once the dominoes started falling, Citadel and Point 72 had to step in and work in the shadows to stop the sneeze. We all know what happened on Jan 28th, 2021. Those long hedge funds who loaded the Options Chains then took profit and a lot of people stepped in to short the top which was predetermined by smart money. https://i.redd.it/07iwvifqrjpc1.gif Enter RC the CEO AND Chairman of the Board: GameStop wisely did an ATM and raised 1.6 billion in cash and wiped most of it’s toxic debt. I think their only major debt is the COVID relief loan from the French Government which is on favorable terms. No sense in wiping that out. He tried some Amazon guys as higher up positions but obviously that didn’t work out. That’s when Daddy Cohen stepped in and said, “Fine, I’ll do it myself!” He came in with a memo got GameStop employees (While taking no salary for being CEO) and said that things will be hard. We will have to be more efficient at what we do or we die. Get ready to work hard. The counter argument will always be that the revenue is dropping quarter after quarter. I don’t disagree but the company is producing better margins which is critical. (More later in the DD) I honestly don’t think Shorts / Wall Street thought it would go on this long and if they did, they thought the company would be burning through all their cash. That’s not what is happening now that RC is at the helm. Basics of the Business: (Go to Marantz or I’ve seen some good deep dives for DD’s recently on core fundamentals. I think they have covered the lowering of SGA, increased margins, and EPS pretty well.) So I’ll just break down the simplest KISS method I learned in the Marines (Keep It Simple Stupid) Remember, Revenue is not profit. Example: Let’s say a GameStop store is bringing in say 1 million dollars of Revenue but it’s costing GameStop as a business1.2 million to run it. You have 1 million in Revenue but you are losing 200k each year by keeping it running. Therefore by closing that store you save yourself from losing 200k but you lose that Revenue stream, unless it comes from somewhere else like online sales or say marketable securities. I think I understand what RC is doing. He’s getting back to the basics of a company which produces profits while transitioning GME to more online to keep the overhead lower. GameStop doesn’t have to be like an Amazon giant Retailer to win against the shorts. They just have to start producing profit each quarter and keep cash coming in. That means retail needs to continue shopping there at the stores. I haver literally never seen a company go out of business that was profitable, with a rabid investor base, good leadership (RC taking zero pay) and over 1.2 billion in cash. Shorts biggest hope has been that GME bleeds out all their cash however, GME going profitable hurts that thesis. I think I’m pretty fair about GameStop: They aren’t a perfect company who puts out billions in Revenue with low overhead. GameStop is a company trying to survive but if they do, then someone is going to have to foot their LONG ASS Bill which I think is coming to them. I’m realistic and pretty pragmatic. I called GME to the downside over the last two weeks. I explained the stacked Puts at $10, $12, $13, and $15 dollars. Over 3 million shares worth of options contracts. On little LIT exchange volume, shorts can easily knock down the price of the stock with that amount of money stacked up. However, I see a longer term pattern developing and it’s bullish….And I’ll back it up with data you can see with your own eyes. Stick with me for a second. If you have ever heard the expression, “If you can’t beat em, join em?” https://i.redd.it/o2wqxdh87ipc1.gif I think Wall Street is starting to realize, this GameStop problem isn’t going away. Retail will continue to buy no matter the price and there isn’t really price discovery because they didn’t think the company would turn it around.Example : Companies went long and short on TSLA. Ironically, Citadel was one of the ones who backed TSLA long and helped get their stock way up. Shorts on TSLA had a point but Elon had built a cult like following who just kept buying every dip on them. Once they would squeeze up, Elon would issue out an ATM and raise even more cash to help strengthen the balance sheet. This puts more pressure on long time shorts thinking it was going out of business. You get the picture…… Blah Blah….Get to the point and the facts!! Here is Wyckoff Accumulation and Distribution Charts: His work/theories still holds up today. I want you to zoom out to the Daily on GME: Look familiar? Now think about this. Every short is a potential buyer. It’s just if they buy back with a gain or a loss!! However, I don’t believe we have price discovery on GameStop because it flies in the face of conventional wisdom. It’s trading at too high P/E ratios so they have kept it suppressed not allowing price discovery. GameStop wasn’t supposed to make it out alive but they did. The Technical condition of GME is IMPROVING as several of the pertinent indicators have turned positive and the THE STOCK APPEARS TO BE UNDER ACCUMULATION!!!Oh, wait a second, you are saying these chop chop price movements are because smart money is trying to get back in. Yes, so someone is crushing IV and slowly stacking options / shares. These chops I think are institutional buyers trying to come back in. This makes me want to add as many as I can before it gets too expensive for me to buy again. I don’t think it’s going to be as crazy as before, but I think this ends up being more gradual a run up. Who know, maybe it will spike but I think they are trying to keep an handle on this so not to expose what the Markets really are to outsiders. I’m just showing you the Options Chains to explain the price movements and where money is slowly being stacked.We have been gravitating toward the $10 and $12 Put side with downward pressure, but I think as IV gets slowly pushed down and the Price, we may see more Funds starting to creep back in. Below is next weeks options chains Below is April 19th Options Chains You don’t want a bunch of people poking around while you manipulate the market…… I’m not sure who’s on the other side of this right now but I think they are realizing that GME isn’t going anywhere and neither are we, so…… If you can’t beat em’, join em’!! submitted by /u/anonfthehfs to r/Superstonk |