Situation Preface

  • Ongoing Conflict

    • There is an ongoing informational and financial conflict between those that hold bullish long term view of GME, e.g. shareholders, and those that hold bearish negative view of GME, e.g. short hedge funds and perpetrators of naked short selling.

  • Naked Short Selling

    • Naked short selling is a real and prevalent form of illegal fraud that steals value from shareholders of victim companies.
    • Naked short selling contributes to market manipulation by artificially increasing the supply of shares being traded in the market.
    • The intent of some naked short sellers is to achieve financial gains by betting against the target victim company and causing it to go out of business.
    • The DTC, a self-regulating organization (SRO), responsible for the functions of a central securities depository, is complicit in ongoing naked short selling by failing to hold the perpetrators accountable and enabling the illegal activity to continue.

  • Share Ownership

    • Shares held in brokerage accounts are considered beneficially owned and do not represent true share ownership. The true owner of these shares is Cede & Co, a subsidiary of the DTC.
    • Registered shares provide true share ownership and takes the shares out of DTC's possession.
    • DRS (the direct registration system) is the mechanism that allows shareholders to have shares directly registered in their name, providing the shareholder with true share ownership.

Conflict Participants

  • Factions and Participants

    • GME proponents, including shareholders, company insiders, and anyone else that wants to see the company succeed
    • GME opponents, including short hedge funds holding a GME short position, perpetrators of naked short selling of GME, and anyone else that wants to see the company fail
    • Regulators, e.g. the SEC
    • Self-Regulating Organizations (SROs), e.g. the DTC, FINRA
    • The media, on a spectrum of credibility, that reports honestly or dishonestly about what is really happening
    • Social media companies (e.g. Reddit), that possess the authority to control communities and information

  • Objectives and Motivations

    • GME proponents want to see GameStop succeed and have a financial interest in seeing that success materialize.
    • GME opponents want to see GameStop fail and go out of business, and have a financial interest in the materialization of GameStop's demise.
    • GME opponents have created a zero-sum situation in which they have committed themselves to succeeding from GameStop's demise. The only outcome in which GME opponents survive at all necessarily requires GameStop to go out of business. Because of this, the opponents are taking any and all actions that they can that will help them achieve this outcome.

  • Victory Conditions

    • Proponents of GME achieve victory in this conflict when the opponents capitulate. This would coincide with a (potentially significant) increase in the market value of shares of GME.
    • Opponents of GME achieve victory in this conflict when the proponents capitulate, the trading price of GME reaches $0.0001, the company goes out of business, and their short position remains unclosed indefinitely.

GameStop

  • GameStop is a company that is the victim of egregious naked short selling of its stock (GME).
  • GameStop is at no risk of bankruptcy in the short to medium term.
  • GameStop demonstrates actions conducive to long term success, which includes exploring new avenues for revenue.
  • GameStop shareholders and board of directors are in alignment.
  • Approximately 25% of all officially issued shares of GME have been directly registered by approximately 200,000 individual investors.
  • GameStop has $100 million in cash on hand set aside for the purpose of a potential share buyback, if such an action becomes deemed worthwhile. This means that if the trading price of GME drops below a certain value, GameStop can execute a share buyback which would cause the supply of GME shares to decrease and cause other outcomes.

Conjecture

  • If a sufficient number of shares were directly registered, it would undeniably expose the reality that there are too many shares (counterfeit shares) in existence in the market, under the DTC's watch
  • The conditions of the situation as it now exists implies that the perpetrators of naked short selling are committed to their bearish bet and that their only way they survive this situation is if the victim company goes bankrupt and dies.
  • A short squeeze can happen when the price of the stock goes up and causes short sellers (and naked short sellers) to buy shares in the open market to exit their position.
  • A probable short squeeze can be considered an asset to long term bullish investors that have an interest in the value of their shares going up over time.
  • The mainstream financial media demonstrates obvious bias against GameStop and against GME investors.
  • Methods of propaganda are used by the faction of GME opponents to manipulate public opinion and sentiment.
  • The propagated view that benefits GME opponents is one that suggests that GameStop has no long term chance to succeed and that GameStop investors that believe in the long term success of the company are necessarily misinformed or even delusional.