Anyone following this. Whatever happens, its been equally compelling of a story as it was the first time around. I'm not getting wild on it, but did buy a couple hundred worth of call options. Worth the roller coaster ride even if I lose.
Story goes...
Something like 4-6 weeks ago, Roaring Kitty (Keith Gill), the main catalyst behind round 1 three years ago, pops up on twitter out of the blue after being MIA from all social media for 3ish years. Posts a bunch of memes on twitter, and then on reddit posts his GME position which is something like $200 mill+, which involves both shares of the company and call options that expire 6/21.
After some momentum, and a lot of media attention, the price rises to $62 after hours (after hovering in the 25-30$ range for multiple days). The next day, gamestop CEO takes advantage of all the media attention and releases 75 million shares to the open market to raise cash for the company, causing massive dilution, and the stock price plummets below $30. This same day (Friday 6/11) Roaring Kitty does a live youtube stream to show people that it has actually been him posting on reddit and twitter. Over 600K people tune in for that livestream. He shows his position, which he still has not sold. Still, the price plummets. After everything is digested over the weekend for retail investors, people seem to buy back in (my guess is because Kitty showed he was still in). The price goes up, and then more short sellers come in causing the price to drop, up one day, down the next, up one day, down the next, etc....meanwhile, gamestop announces that after they released those 75 million shares, they are now sitting on 4 billion in cash, and have zero debt. Now people are looking at it as a legit company that has the ability to make massive purchase and takeover moves.
Everything seems to be culminating today. Today, Roaring Kitty sold roughly have of his options, and exercised the other half. So now he has millions of dollars worth of shares owed to him, and he is sitting on $6mill + in cash to swoop on any dip. Meanwhile another whale that held even more call options exercised as well. Settlement for the call options is trade date, +1 day (T+1), so now $18mill+ in shares are due tomorrow to 2 people, who seem intent on holding. Many of the short sellers got scared off, mainly someone by the name of Andrew Left who lost millions the first time around 4 years ago, and decided to try his luck again this time, announced today that he is out. the entities that owe the shares to Roaring Kitty and the other guy now have to make the decision tomorrow to cover those calls immediately, which should raise the price, or to hope that the price goes down, and cover at a lesser price. Either option in theory leads to the price going up (the latter option might now have a green effect til after hours tomorrow, or til Monday).
What could prevent the price from skyrocketing is that even with some short selling whales backing out, there are still many that remain. Do they give up, or do they remain stubborn and double down in a last ditch effort?
Tomorrow is going to be intriguing either way.
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