[0:00] Like, the thing is, people don’t appreciate
that this is, like, we’re in a war
[0:03] [Upbeat music]
[0:10] Diamond hands!
[0:17] Infinite means infinite!
[0:18] Infinite risk!
[0:20] Infinite reward!
[0:21] Sure my portfolio looks a lot of red, but
I’m in it for the long haul!
[0:24] Lambos or Wendy’s I’m gonna get my tendies!
[0:28] There are tens of thousands of hours of video
and text in existence all seeking to explain
[0:33] what exactly happened with GameStop in January
2021.
[0:38] There are explainer videos, unhinged rants,
congressional hearings, and Netflix-produced
[0:43] documentaries all trying to tell the story
of this one weird moment in time and what
[0:48] it might mean, what it says about us, our
society, and our economy.
[0:53] The common version is that a band of plucky
retail investors put the screws to hedge fund
[0:59] Melvin Capital in a historic short squeeze,
an unprecedented win for the little guy.
[1:05] The nuanced read is that it was a confluence
of once-in-a-generation social forces, a short
[1:10] squeeze but also a FOMO fuelled social media
phenomenon where just as many regular folk
[1:16] got wrecked as made off like bandits.
[1:19] That, however, is merely where our story starts.
[1:23] This is a story about what happened next.
[1:25] This is a story about finance, social media,
conspiracy theories, gambling, mortal men
[1:30] elevated to mythological figures, and a mountain
of human suffering built of a thousand little
[1:37] lies.
[1:38] This is financial advice.
[1:41] [Melancholy music]
[1:45] And a cold wind is blowing in and the children
freeze and die
[2:20] “Few subjects relating to exchange practices
have been characterized by greater differences
[2:23] of opinion than that of short selling.”
[2:25] A short sale involves borrowing an asset,
selling it at current market value, and then
[2:32] returning it later, ideally at a lower price
then when it was sold.
[2:37] Put simply, it’s selling borrowed goods
to buy back at a profit.
[2:42] There are some things that we need to caveat
right off the top here.
[2:45] First and foremost is that meme stock investors,
or Apes as they call themselves for reasons
[2:49] we’ll get into later, aren’t engaging
with reality as you or I understand it.
[2:54] You’ll hear of references to things that
you’re aware of, companies that exist in
[2:58] your universe, but you and Apes aren’t talking
about the same thing.
[3:04] Your version of GameStop is an unprofitable
mall retailer that was headed slowly but inexorably
[3:09] towards bankruptcy due to societal shifts
and regular old mismanagement that in 2021
[3:15] got something resembling a second chance via
once in a generation circumstances.
[3:19] That second chance might pan out into some
form of future relevance, or at least existence,
[3:24] maybe, but could just as easily be squandered
and result in bankruptcy anyway.
[3:29] One way or another the price as it currently
stands is still floating well above GameStop’s
[3:34] historical peak profitability during the heyday
of the Wii, PlayStation 3, and XBox 360, so
[3:41] even a tremendous turnaround would still almost
certainly see the stock price continue to
[3:47] decline.
[3:48] The Ape version of GameStop is an apocalyptic
catalyst, the chosen vessel through which
[3:52] the world will be reborn, a mythological entity
built, brick by brick, out of communal desperation,
[3:58] delusion, and cope, obsessed with the financial
concepts of short selling and a short squeeze.
[4:05] Their version of reality is, undoubtedly,
more interesting, more dramatic, and more
[4:10] sensational, but the reasons for its existence
are complex.
[4:15] It is tempting to say that the participants
are merely ignorant or incompetent but the
[4:20] sticky truth is nuanced.
[4:22] There are many elements of Ape lore that are
pure performance, overt pieces of fiction
[4:27] that persist in the collective narrative simply
because it would be nice for Apes if they
[4:32] were true.
[4:33] The primary lens of ape culture, born as it
was on Reddit, is that of video games.
[4:38] They have cast a variety of people, businesses,
and institutions as their matched opponent,
[4:44] and will often post taunting letters addressed
to Ken Griffin specifically or hedge funds
[4:49] broadly where they invoke their prowess in
MMOs.
[4:52] “Bro I play runescape.
[4:54] I literally grind for days to watch a number
go up 1.
[4:59] Been playing 15 years and still not lost interest.
[5:02] They think it’s going to be any different
now?”
[5:04] “I just realized how fucked shorts are.
[5:07] They picked a fight with the gaming industry.
[5:09] The same people who will grind hours on end,
losing thousands of times in a row, to simply
[5:14] get one win.
[5:15] We refuse to end on a loss, we refuse to sell.
[5:18] “I did one of the most degenerate grinds
that exists for this picture only”
[5:25] This entire genre of post is profoundly sad,
not merely because of the implication that
[5:30] a willingness to wander in circles for hours
clicking on virtual plants is somehow a transferable
[5:36] skill to playing the stock market, but because
they all presume a very high degree of symmetry
[5:42] and intentionality.
[5:43] They are based in the belief that, like in
a video game, both sides are knowingly engaged
[5:49] in a matched competition.
[5:50] But when you back up and evaluate the whole
picture, their opponents aren’t aware of
[5:55] the game at all, assuming the ape is even
talking about a group that actually exists.
[6:01] On their forums they are winning epic battles
against automated trading algorithms specifically
[6:07] tuned to drive GameStop out of business, they
are in a war with the “hedgies” who are
[6:12] always, every single day, “getting desperate”
and “running out of ammo”.
[6:18] In reality Apes are shadow boxing the random
noise of the market and losing.
[6:23] It has become a layer cake of every genre
of magical thinking, newfaith religiosity,
[6:28] reheated conspiracy theories, and general
superstition with an added extra-thick frosting
[6:34] in the form of financial woo, get-rich-quick
culture, sunk costs, and gambler’s fallacy.
[6:39] A lot of their language is rooted in the culture
of 4chan and Reddit.
[6:43] They call themselves “Apes” partly in
reference to Planet of the Apes and Starship
[6:48] Troopers, but also because the other words
they call themselves made them look bad when
[6:53] the media started to pay attention.
[6:55] It is a hazily defined movement dispersed
across all of social media and dozens of forums,
[7:01] burdened with two years of petty drama, in-fighting,
and fragmentation.
[7:05] Due to their extreme beliefs their culture
has grown more and more insular over time,
[7:10] so their communication is predictably littered
with in-jokes, niche references, shibboleths,
[7:15] abbreviations, jargon, and private definitions
of words borrowed from other disciplines,
[7:21] which can make it understandably difficult
to follow along.
[7:24] We can get there, I believe in us, we can
make this make sense, but boy howdy does the
[7:31] journey require a journey.
[7:33] The version of the story that you’re already
familiar with is one where a bunch of Redditors
[7:37] tried to short squeeze some hedge funds and
get rich in the process by buying GameStop.
[7:42] “Meanwhile the quote unquote meme stocks
turned over.
[7:47] These companies pumped up by amateur traders
on social platforms like Reddit with the express
[7:52] purpose of forcing certain hedge funds to
lose money, well, they plummeted today.”
[7:57] The version of the story you’re not familiar
with is the one where, two years after the
[8:01] squeeze, Heat Lamp Theory penned by Reddit
user 6days1week argues that financial service
[8:06] provider ComputerShare’s operational algorithm
is being tricked by short hedge funds into
[8:11] storing plan-held shares in the DTCC like
burgers under a heat lamp and also probably
[8:16] someone made it illegal to report these heat
lamp shares as directly registered thus suppressing
[8:21] the evidence that Apes own the float.
[8:24] Although that post was low effort and the
speculation itself turned out not to be completely
[8:29] correct, my hunch was still valid.
[8:32] It was often attacked by what I believe were
bad actors asking me to “prove someone made
[8:37] it illegal.”
[8:38] The abuse of ComputerShare’s algorithm was
obvious to Apes who were paying attention:
[8:44] ever since Ryan Cohen’s “I want to be
the Book King” tweet, it was clear that
[8:49] Cohen was signalling for Apes to terminate
their plans, sell their fractionals, and book
[8:53] their shares.
[8:54] What was not obvious was the reaction of the
mods, who would attempt to bury the story
[8:58] - revealing themselves to be paid shills,
clearly compromised by the hedgies in order
[9:03] to distract from Heat Lamp.
[9:05] “Censorship of Heat Lamp DD shows we are
heading in the right direction”
[9:08] “What the fuck is this shit?
[9:11] So we still get pushback for Heat Lamp at
other places, but someone can post a sponsored
[9:15] DD that is literally the definition of FUD
and says in that comments that DRS is pointless
[9:21] and MOASS will not happen.”
[9:23] “THE HEAT LAMP THEORY dd to me is as impressive
as the house of cards dd.
[9:28] It’s like the dd’s from the beginning
of super stonk.”
[9:31] So, yeah, there’s a lot of ground to cover
before that makes any sense at all.
[9:37] [orchestal music]
[9:50] The wheels of finance spin beneath the surface
of the modern world.
[9:55] Everywhere you look the impact can be felt.
[9:58] The modern corporation consists of many moving
parts, from manufacturing to distribution
[10:03] to communications.
[10:05] Likewise the finances behind the corporation
are equally complex, a delicately balanced
[10:11] dance of equity and credit that facilitates
the many wonders of the modern world.
[10:15] One of the most misunderstood and contentious
mechanisms of this dance is what is called
[10:19] a “short sale.”
[10:21] “Few subjects relating to exchange practices
have been characterized by greater differences
[10:25] of opinion than that of short selling.”
[10:29] Though many characterize shorting as a toxic
modern practice, in reality it is quite old.
[10:34] And it has polarized people for as long as
it’s existed.
[10:38] But what is a short sale?
[10:40] A short sale involves borrowing an asset,
selling it at current market value, and then
[10:45] returning it later, ideally at a lower price
then when it was sold.
[10:50] Put simply, it’s selling borrowed goods
to buy back at a profit.
[10:54] Two things happen with this arrangement.
[10:56] First is that the short seller gets to hold
the full sale value for a period of time until
[11:01] the asset is returned, providing them with
capital that they can use in the interim.
[11:05] Second is that when the asset is returned
this represents not the moment where the short
[11:09] seller makes money, but merely when they lock
in their final profits.
[11:13] The risk/reward proposition of short selling
is that gains are capped by the price at the
[11:18] time of borrowing.
[11:19] If an asset is borrowed at $5 then the absolute
maximum profit is $5 (discounting fees and
[11:26] interest, of course.)
[11:28] On the flip side is the risk profile.
[11:30] The maximum losses of a short sale are effectively
infinite as the price of the asset isn't bounded
[11:36] to 100% or even 10,000% of the original sale
price.
[11:39] As the trend for the economy as a whole is
to grow, a stock going from $5 to $10 is far
[11:45] more common than stocks going from $5 to $0.
[11:48] In addition the borrower is expected to pay
the original owner a recurring fee based on
[11:53] the value of the asset, similar to interest
paid on a loan, called the cost-to-borrow,
[11:58] or CTB.
[11:59] However unlike a personal loan that you might
already be familiar with, such as a mortgage,
[12:03] where the payments encompasses both interest
and principal on a schedule where the whole
[12:07] loan is eventually paid off, the cost to borrow
is paid every month, prorated by day, with
[12:12] no cap, thus borrowing an asset for long periods
of time can quickly eat up profit margins
[12:17] or even exceed the original value of the asset
itself.
[12:20] For these reasons it is uncommon to hold a
short position for long periods of time.
[12:24] Even though the name “short-selling” comes
from the bet that the asset will decline,
[12:28] or “fall short,” it is coincidentally
appropriate that short plays tend towards
[12:32] short time frames of weeks or months rather
than months or years.
[12:36] However this short timeframe leaves the borrower
more exposed to short-term volatility.
[12:41] Disruptions that might temporarily set a company
back without impacting the overall health
[12:45] of the business can benefit short-sellers
greatly, while unexpected good news can generate
[12:50] a surge of excitement about a company that
may leave short-sellers hurting, and lenders
[12:55] pressuring them to return the asset or incur
further liability.
[12:58] At the most extreme, lenders can compel the
borrower to return the asset in full, regardless
[13:03] of the cost to the borrower.
[13:05] When short sellers are impelled to return
large volumes of shares all at once this sudden
[13:10] buying pressure can further potentiate upwards
movement on the price of the security, applying
[13:15] further margin pressures to other existing
short positions.
[13:18] This situation is commonly referred to as
a “short squeeze” as the short-sellers
[13:23] are squeezed out of their positions by the
accelerating costs.
[13:27] “I mean they can try, they can try as hard
as they want to demoralize us, but as I always
[13:34] say: no cell, no sell.
[13:35] I’m not selling.
[13:36] Power to the player.
[13:37] Power to the shareholders.
[13:39] Power to the individual investor each choosing
for themselves a, a company they believe in.”
[13:48] In late January 2021 video game retailer GameStop
became a media sensation as the value of their
[13:54] stock rose from $20 to just shy of $500 over
the course of four days.
[14:00] The exact confluence of events that led to
this have been thoroughly documented, so we
[14:05] won’t drag the point out here, but the critical
takeaway is this: it was a once-in-a-lifetime
[14:10] event that hinged off multiple specific coincidences.
[14:16] The pandemic made the situation for brick-and-mortar
retail dire due to multi-valent impacts, so
[14:21] many hedge funds had taken out short positions
against them anticipating a continued decline
[14:26] in revenue and thus share price
Governments begin to distribute stimulus packages
[14:32] in an attempt at offsetting the economic impact
of the pandemic
[14:37] There was a zeitgeist of futility in the air,
that financially the average person was screwed,
[14:43] the stimulus package wasn’t enough to fix
anything, so you might as well blow it on
[14:47] something reckless
[14:49] In specific, hedge fund Melvin Capital holds
a truly reckless short position in GameStop
[14:54] that left the fund extremely exposed if the
price were to rise, and traders on Reddit
[14:59] see this as an opportunity and begin promoting
it on YouTube, Twitch, and Twitter.
[15:04] As the idea of getting in on a potential GameStop
short squeeze spreads through social media
[15:09] in late 2020 the messaging gets flattened.
[15:12] New people are flooding into Reddit’s Wall
Street Bets forum, they are bringing with
[15:16] them their own ideas, their own politics,
their own expectations.
[15:20] The thing that really speaks to people, and
thus works well for recruiting, is the idea
[15:25] that this is a chance to hurt Wall Street.
[15:27] As more and more people pile in the experienced
traders get tired of explaining things over
[15:32] and over, thus new people are being on-boarded
by people who themselves have a stock-trading
[15:39] career best measured in hours.
[15:42] These are users who jumped onto forums and
explicitly asked “how do I get in on GameStop
[15:47] as fast as possible?”
[15:48] They’re not getting a lecture on risk management,
market operations, and exit strategy, not
[15:54] that Wall Street Bets would ever be a good
place to get those, they’re getting a hype
[15:59] speech about revenge for 2008 and a bare-bones
series of instructions on what buttons to
[16:06] push.
[16:07] Potentiating that, any large, leaderless movement
with foggy politics is going to attract a
[16:12] whole slew of political opportunists from
all across the spectrum who hope to steer
[16:18] the tsunami in their preferred direction.
[16:21] These people, trying to transform it into
a coherent political movement, inject and
[16:26] amplify a lot of narrative about solidarity
and making a difference.
[16:30] Ape together strong.
[16:33] That’s the kerosene that primes this whole
thing to turn into an apocalyptic investment
[16:39] cult.
[16:40] [match lighting]
[16:41] This is a bold claim, and it’s basically
unfalsifiable, but I feel like I can point
[16:46] to the match, the event that really, truly
allowed for conspiratorial thought to take
[16:52] permanent root in Ape culture, and that’s
January 28th, 2021, mid morning, when Robinhood,
[16:59] an app-based free brokerage, disabled the
buying of GME and a selection of other meme
[17:05] stocks.
[17:06] “Just this morning Robinhood, which is really
seen as the brokerage firm of choice for a
[17:11] lot of those younger investors said that in
light of recent volatility they’re restricting
[17:16] transactions for certain securities to position-close-only.
[17:19] And to be clear that means you can sell names
like GameStop but you can’t buy them.”
[17:24] That was the day the price hit its all-time-high,
and in Ape mythology that was when they were
[17:29] on the cusp of, like, total revolution, the
entire system was about to collapse and Apes
[17:36] were about to be crowned victors over Wall
Street.
[17:39] Robinhood turning off the buy button was,
from their point of view, an obvious sign
[17:44] of targeted disruption.
[17:46] The reality is far more mundane, Robinhood
runs a “disruptive” brokerage with a very
[17:52] tech-bro “it’s better to ask for forgiveness
than permission” philosophy.
[17:56] In a nutshell the idea is that they run all
their accounts by default as a kind of limited
[18:02] margin account that they call “instant deposits.”
[18:05] You make an account, start to transfer money
to your account, the money hasn’t technically
[18:10] arrived yet, but Robinhood lets you act like
it has.
[18:14] You want to buy a stock, Robinhood pays for
it up front, and then just takes your money
[18:18] when it finally arrives.
[18:20] This undeniably speeds things up and makes
them appealing to, say, a huge swath of people
[18:26] who want to get in on this opportunity to
make wife-changing money right now before
[18:31] it’s too late, but exposes Robinhood to
pretty substantial risk.
[18:35] If a million new users all sign up on the
same day and all immediately try and buy GameStop
[18:41] at $300 a share via “instant deposits”,
Robinhood might risk running out of money.
[18:49] So the mundane reality is that the influx
of new users all making pretty aggressive
[18:54] plays in a specific basket of stocks stressed
Robinhood’s credit and threatened its collateral
[18:59] across the board, so they shut down buying
of those specific securities to protect themselves.
[19:05] In the aftermath the CEO of Robinhood, Vlad
Tenev, denied that the company had, in fact,
[19:11] basically run out of money which may or may
not have been true, but did confirm the fundamentals
[19:16] of the threat.
[19:18] “We’re really in unprecedented times,
and in order to protect the firm and protect
[19:23] our customers we had to limit buying in these,
in these stocks, and to be absolutely clear”
[19:31] “It sounds to me as though there was a liquidity
problem.”
[19:38] Turns out giving everyone a margin account
is a good idea until it isn’t.
[19:43] But that’s boring.
[19:45] You know what’s exciting?
[19:46] They turned off the buy button specifically
to kill the squeeze!
[19:51] They want you to sell!
[19:52] That’s an exciting idea!
[19:54] The funny thing is that it didn’t even kill
the pump!
[19:57] Sure, Robinhood and a few other app-based
brokers with a similar structure halted buying,
[20:02] but cash-account brokers were trading just
fine, and GME still rallied pretty hard the
[20:07] next day, peaking back over $400.
[20:10] The buy button was maybe a wake up call, a
sign that the music was probably about to
[20:15] stop and you should cash out while you can,
but what actually killed the momentum was
[20:20] the weekend.
[20:22] When the smoke clears there’s a congressional
hearing, there’s an SEC report, there’s
[20:27] actually a ton of scrutiny in and around the
specific events.
[20:31] Melvin Capital eats some truly staggering
losses and needs to turn to Citadel Securities
[20:36] for a bailout to avoid closing entirely.
[20:40] Regulators are worried about how well they’re
communicating with retail investors, Legislators
[20:44] are worried social media influencers aren’t
accountable enough.
[20:48] Everyone knows that a charismatic figure can
fleece individuals and pump and dump a single
[20:52] stock, but do the events of January suggest
that influencers can pose a systemic risk
[20:57] to the market itself?
[21:00] Who, if anyone, was responsible for January?
[21:05] Thing is that while a bunch of people made
a ton of money off GameStop in January, that
[21:10] money has to come from somewhere.
[21:13] In an actual short squeeze the idea is that
the money comes from the short sellers, they’re
[21:18] the ones buying vastly overpriced GameStop
shares.
[21:22] So if this was a squeeze that’s simple,
but, you know, was it actually a squeeze?
[21:30] The SEC report didn’t come out until fall
2021, and while still pretty dry and technical
[21:35] it does try to engage with the general public
who know a bit about the stock market but
[21:40] aren’t deep in the weeds.
[21:41] It’s not flawless, but the conclusions are
sound.
[21:45] GameStop was a complicated mix of activities
that fed off one another.
[21:49] There was a short squeeze in the mix, a bunch
of the traffic that saw GameStop starting
[21:53] to pump at the beginning of the week was driven
by known short-sellers closing their positions,
[21:58] but the main body of it all, the buyers who
pushed the price up to just shy of $500, that
[22:04] was overwhelmingly retail buyers.
[22:07] The people left holding the bag when the music
stopped wasn’t Melvin, wasn’t Citadel,
[22:13] wasn’t Vanguard, wasn’t BlackRock, it
was Apes, and a lot of those Apes were new
[22:18] recruits whose first day of stock trading
in their lives was from installing Robinhood
[22:24] and buying GME that week.
[22:27] The story of Apes post-squeeze is a bunch
of people standing around a trashed hotel
[22:32] room at 5am asking when the party is supposed
to start, a bunch of newly minted bagholders
[22:38] trying to manifest another even larger squeeze
because the only way they could possibly make
[22:44] money off their $420 GME shares is if it somehow
goes even higher.
[22:51] Everything becomes fodder for theories about
what really happened and why the price didn’t
[22:56] just keep going up.
[22:58] Direct share registration, naked shorts, RegSHO,
any of a dozen other arcane financial concepts,
[23:01] none of these mattered to Apes at all in January,
but suddenly in February and March these ideas
[23:08] get injected as explanations for why the squeeze
didn’t keep squeezing.
[23:13] They will, in the months that follow, re-cast
January as “the sneeze,” both to suggest
[23:18] that not only was it not the main event, it
was a tiny blip compared to the inevitable
[23:24] true squeeze, the mother of all short squeezes:
MOASS.
[23:29] “I’d like to welcome you all to the Bellagio
resort and casino in scenic Las Vegas Nevada.
[23:38] We’re just enjoying some early tendies.
[23:44] There’s some news on the wind that big things
are coming, big things are coming as early
[23:51] as this weekend, and Bobby’s pumping.
[23:54] I don’t think anything could really go wrong.
[23:57] I think there’s a lot of people who want
to make it look like things are going wrong.
[24:02] I hold for the infinity pool.
[24:04] I just I buy I hold I DRS.
[24:09] MOASS is a tricky thing to talk about.
[24:11] First of all it is a pure financial conspiracy
theory.
[24:15] We’re used to conspiracy theories that intersect
with finance, most get around to the subject
[24:20] of international bankers eventually, but those
theories tend to start in sociology, science,
[24:26] or politics and then expand to cover finance
as they grow.
[24:32] MOASS starts in finance with the operations
of the stock market, so just from the word
[24:37] go the subject is already inundated with unfamiliar
terminology, organizations, and acronyms.
[24:45] This is all compounded by the fact that the
exact composition of the belief is mercurial.
[24:50] MOASS is a vessel conspiracy containing many
other modular theories.
[24:56] These theories are disparate, obtuse, self-referential,
and often contradictory if not outright paradoxical.
[25:03] It is, as a whole, a theory that resists critical
thought at every turn.
[25:08] If you try to formulate an all-encompassing
version of it you will find only frustration.
[25:14] The jar, MOASS itself, is the belief that
for some reason or another GameStop or some
[25:20] other meme stock company is going to skyrocket
in value and make everyone who times it right
[25:26] unfathomably rich in the blink of an eye.
[25:29] Everything inside the jar is the how and why.
[25:34] Taken as a whole MOASS is many things: it’s
an apocalyptic event, it’s an infinite money
[25:39] glitch, it’s revenge against Wall Street,
it’s salvation for those who gambled away
[25:44] their savings, but above all MOASS is a story,
and that story goes a little something like
[25:52] this.
[25:53] ”What you need to know before the MOASS,
during the MOASS, and after the MOASS!
[25:57] So let’s start by chugging this bitch and
then get going.
[26:01] We know we own the float.
[26:03] So if they have to cover, that means that
they have to pay the price that we say.
[26:07] Now if we hold to ten million, that’s what
they have to pay.
[26:11] So if it goes to a hundred thousand, if it
goes to two hundred fifty thousand, if goes
[26:15] to one thousand, if it goes to five hundred,
that ain’t the squeeze, baby, that ain’t
[26:19] the squeeze.
[26:20] What’s the squeeze is once it’s past ten
million.
[26:23] Then we’re squeezing!
[26:24] “Some point in the near future, in my opinion,
we have the MOASS actually happening where
[26:29] we survived all the FUD, we survived the short
attacks, and then the MOASS happens, baby.
[26:34] And then we pass our floor of 10 million or
20 million and we get up to a ceiling of,
[26:40] let's say, $420 million a share.
[26:42] And if you're raising your eyebrows, saying,
"That's not possible.
[26:44] The whole economy will be ruined."
[26:46] Shut up!
[26:47] You don't know what you're talking about.
[26:48] Do your research.!
[26:50] “500 million per share is not a meme, I
am dead serious.”
[26:54] Major financial firms, most notably hedge
funds such as Ken Griffin’s Citadel, owe
[26:58] their profits to massive volumes of fraudulent
naked shorts sales, flooding the market with
[27:03] phantom shares that suppress the price of
companies like GameStop, AMC Theatres, and
[27:08] Bed Bath & Beyond.
[27:10] This scheme has generated unfathomable amounts
of debt that Hedgies could never afford to
[27:15] pay back, hundreds of billions of shares owed
that don’t actually exist and thus cannot
[27:20] be returned adding up to trillions of dollars
of debt, so their only hope is if the victim
[27:25] company goes out of business entirely allowing
the Hedgies to walk away with tax-free gains.
[27:32] The risk is so extreme that it justifies every
employee at hundreds of financial institutions,
[27:37] the media, the government, and the courts
all cooperating to keep the conspiracy under
[27:42] wraps.
[27:43] But if that scheme were to be revealed, if
Citadel were forced to buy back those hundreds
[27:48] of billions of shares, it would trigger a
short squeeze that would send GameStop’s
[27:52] share value into phone number prices and create
a cascade that could topple the entire global
[27:58] economy.
[27:59] Because there are so many fake shares Apes
have already bought more shares than are supposed
[28:03] to exist, they own the float, and have thus
positioned themselves to be the beneficiaries
[28:09] of that apocalyptic unravelling as long as
they can remain united and refuse to sell
[28:14] their shares.
[28:15] If no one sells then the supply is zero and
the price is infinite.
[28:20] Then Apes can dictate not only the price,
but they can make demands.
[28:25] If Ken Griffin isn’t sent to prison for
his crimes the deal is off: no cell, no sell.
[28:32] As the evidence of the fraud ripples through
the economy, as the entire stock market is
[28:36] revealed to be a sham, faith in institutions
will falter, and in an existential crisis
[28:42] the government will be forced to make Apes
whole or else face their own extinction, precipitating
[28:47] the greatest transfer of wealth in human history.
[28:51] And then, when the flames of MOASS have cleansed
the earth, it will usher in a golden age of
[28:55] humanity stewarded by the true diamond-handed
Apes who did not flinch in the face of paltry
[29:01] 1000% gains, did not become paper-handed bitches
over mere wife-changing money, but hodled,
[29:07] hodled in the face of Fear, hodled in the
face of Uncertainty, hodled in the face of
[29:12] Doubt.
[29:14] “So what happens in theory when they can’t
get enough shares (even with the price in
[29:20] the millions)?
[29:21] “The price goes to the tens of millions.
[29:23] Then hundreds of millions.
[29:24] Billions if it has to.
[29:26] Price is just supply and demand.”
[29:29] “All I have to do is buy one stock
[29:31] Buy one stock
[29:34] GameStop
[29:35] Feel good about it, and watch the world crumble”
[29:39] A thing that’s kinda beautiful about a short
squeeze is that you don’t really need to
[29:43] do anything, you just need to be in the right
place at the right time, and a thing that
[29:48] marbles the whole subject of memestocks is
a sublime laziness.
[29:54] This is a characteristic of all get rich quick
schemes, but it’s important to keep in mind
[29:58] as Apes build this complex theory, as they
fill the jar, and as they become increasingly
[30:04] irate when MOASS fails to materialize, that
all they’ve done, all they’ve actually
[30:09] done, is press a “buy” button.
[30:12] As Marantz said, all he has to do is buy one
stock, feel good about it, and watch the world
[30:18] crumble.
[30:19] It’s just Reddit’s version of the Rapture.
[30:21] Now, in these sample narratives of MOASS we’ve
already made a mistake, which is trying to
[30:25] pin down the specifics in some coherent way.
[30:29] A critical element of talking about MOASS
is that the component beliefs are modular
[30:34] - the jar, the part where Apes get rich, is
the only constant.
[30:38] Any specific belief can be readily discarded
or swapped without posing a risk to the integrity
[30:44] of the structure as a whole.
[30:46] For example many MOASS theories cite the idea
that Citadel wouldn’t need to pay taxes
[30:51] on any gains from short positions if the victim
company goes completely out of business.
[30:56] This makes narrative sense but just isn’t
true.
[31:00] Like, there’s not much else that needs to
be done to debunk that, it’s just false.
[31:05] But removing it from the jar doesn’t really
do anything, and it also doesn’t matter
[31:11] if you debunk it because Apes will just put
it back in anyway.
[31:15] As a result the memestock belief system has
become an absolute rat’s nest of false threads,
[31:20] misinformation, willful ignorance, and reheated
conspiracy theories from the nineties, all
[31:25] of which has been constantly adjusted to compensate
for the fact that reality keeps disproving
[31:32] it.
[31:33] It’s a mess.
[31:34] So how does a philosophy like MOASS develop?
[31:38] That is actually a shockingly long explanation.
[31:41] A major problem here, as I said, is that a
lot of this is contradictory and circular,
[31:46] a pile of half-baked theories cooked up piecemeal
by Apes with no understanding of the underlying
[31:52] subject working specifically to find a thing
that would need to be true in order to maintain
[31:59] the conspiracy cascade.
[32:01] The only reason they believe there are hundreds
of billions of fake GameStop shares in circulation
[32:05] is because that’s the thing that needs to
be true in order to explain why they believe
[32:10] shorts never closed in 2021, and they believe
shorts never closed in 2021 because it’s
[32:16] the thing that needs to be true in order for
the squeeze to still be on the table and the
[32:21] squeeze needs to still be on the table because
otherwise what are you doing?
[32:26] Why are you here?
[32:27] But also a lot of these specific ideas, they
got them from somewhere, and investigating
[32:32] that somewhere just opens up a rabbit hole
where you spend months delving into other
[32:36] pre-existing conspiracy theories that have
tried to graft themselves onto the memestock
[32:42] movement.
[32:43] February 2021, following the price of GameStop
crashing back to earth many Apes who bought
[32:48] in late or held through it were extremely
salty and needed something or someone to blame
[32:53] that wasn’t just, you know, making a poor
financial decision based on Reddit hype posts.
[32:59] The fiasco with Robinhood turning off the
buy button initially floated to the top because
[33:04] there are, even in our reality, some questions
about how that was handled and Robinhood’s
[33:10] business model that are very much worth asking.
[33:13] Apes of course care about none of that.
[33:15] All the talk about market reform is just smoke,
they’re here to crash the system and get
[33:19] rich.
[33:20] So what they see in the Robinhood fiasco is
targeted disruption.
[33:24] Someone pulled strings to turn off the buy
button and stop the squeeze, which means someone’s
[33:29] scared, the whole thing must still be primed
to pop off again.
[33:33] Apes declare that shorts never closed, the
squeeze never ended, it’s just in a bit
[33:37] of a gully and it’s going to shoot back
up any day now if they can get the pressure
[33:42] back up.
[33:43] The second thing they latch onto is that Citadel
bailed out Melvin.
[33:46] Now, in reality this wasn’t a philanthropic
gesture, it was a lot closer to a protection
[33:51] racket shakedown because Wall Street are all
greedy assholes, and Melvin folded under the
[33:56] pressure in 2022 anyway, but it gives Apes
a villain, Ken Griffin.
[34:03] Apes assert that he must have personally called
Vlad Tenev at Robinhood and told him to turn
[34:08] off the buy button in order to protect Citadel
and then lied to congress when he told them
[34:13] under oath that he didn’t do that!
[34:15] This seed narrative proves just sticky enough
to keep people emotionally invested, and from
[34:20] there Apes crowdsource the explanations, tacking
on more and more oblique ideas lifted out
[34:26] of the complexity and obfuscation of capital
markets in order to explain why this thing
[34:31] is still primed to pop.
[34:34] Part of what makes MOASS persuasive, why people
buy in, is that very complexity and obfuscation.
[34:40] People come into the subject with well-founded
skepticism of Wall Street.
[34:44] The narrative that Wall Street is corrupt,
reckless, and greedy is persuasive in no small
[34:48] part because it isn’t wrong.
[34:51] So memestock proselytes present themselves
as the ones who are cutting through the darkness,
[34:57] exposing the deliberately obfuscated truth
of how the market really works, democratising
[35:02] the ivory tower of finance.
[35:04] Now, despite its reputation, finance, as a
subject, is in fact something that you, a
[35:10] layperson, can learn, it is a lot less impenetrable
than it seems.
[35:14] Wall Street is awash with B-minus students
who wrapped their heads around it, you can
[35:18] too.
[35:19] But we need to be careful here because just
because the subject is more accessible than
[35:23] you might think, that doesn’t mean it’s
devoid of actual honest to god complexity
[35:29] and nuance.
[35:30] Understanding how to evaluate a mutual fund
or trying your hand at making money day trading
[35:35] is not that complex.
[35:37] Understanding loopholes in securities regulation
is.
[35:42] So in the theory of MOASS we have a collision
of the rhetoric of the democratisation of
[35:47] finance with the actual impenetrable stuff
that even the majority of the people on Wall
[35:52] Street don’t bother to understand.
[35:54] And the systems of the economy are so intertwined
and obtuse that it’s possible to sculpt
[35:59] almost any story one can imagine through the
framing.
[36:03] It is a perfect recipe for someone to very
confidently present you with extremely wrong
[36:08] information that you have no reference point
to evaluate from.
[36:13] And if it wasn’t already clear, MOASS is
almost totally devoid of any actual economics.
[36:19] Like think about it.
[36:21] Their theory is that Wall Street is so reckless
and greedy that they have created this powder
[36:26] keg that will allow Apes to make unfathomable
amounts of money off of MOASS.
[36:30] But despite this powder keg sitting in the
open where Redditors could stumble into it,
[36:35] no one on Wall Street is greedy or reckless
enough to pursue it despite having substantially
[36:41] greater resources at their disposal to do
so.
[36:44] And the conspiracy Apes claim to be unravelling
is both incredibly vast and yet leaves no
[36:48] material evidence, no memos, no emails, no
insiders, just ghosts in the trading data.
[36:55] But also Apes will readily discard the data
if it tells the wrong story, they’ll just
[37:00] claim the price is fake, the stock is manipulated,
bad news is deliberate misinformation, you
[37:05] can only trust the numbers when the line goes
up.
[37:08] Since you can’t trust news, data, or even
company filings the only thing to do is buy
[37:14] at any price and hold for MOASS.
[37:17] The Mother of All Short Squeezes is a lot
of things, but it’s not a trading strategy.
[37:22] But please, if you think this is at all unfair
to the Ape thesis feel free to ‘do your
[37:27] own research.’
[37:28] Pursue the Superstonk Flipbook page, with
over 200 reddit posts dressed up to look like
[37:32] books.
[37:33] Enjoy such critically acclaimed works as the
Billionaire Boys Club by Bad-Ass-Trader, Trust,
[37:39] Death and Divorce - The Parts of Ken Griffin’s
Life that Haven’t Been Published, and Infinity
[37:43] War, The Final Exit DD Compilation… by gherkinit.
[37:48] Regardless of the lack of actual finance underpinning
it, we do need to establish some basic literacy
[37:53] in order to explain why it all falls apart
and to contextualise what’s so fascinating
[37:58] about the community that has grown up around
it.
[38:01] So real quick, what is a stock, anyway?
[38:04] Stocks, or shares, aren’t a real thing,
they’re an intangible legal claim to some
[38:09] portion of a company or venture.
[38:11] They exist entirely in the realm of the social
contract and in some form or another are as
[38:16] old as civilization.
[38:17] Somewhere in ancient history a couple people
were like, “hey, let’s pool our resources,
[38:23] dig a mine, and then split the proceeds, and
in that moment the share was born.”
[38:28] Then the second dude was like “hey, I don’t
really want to run a mine anymore, I’m trading
[38:33] my share of the mine for a goat farm” and
now you have invented an equity market.
[38:38] Today’s equity markets are a vastly more
complex version of that, and the whole thing
[38:43] is in a constant state of flux, but the core
concept is still there: a stock is an intangible
[38:49] bundle of legal rights that you can sell.
[38:51] But you’re probably thinking to yourself
“what about stock certificates?”
[38:56] Hundreds of years ago if you wanted to sell
your share in a mine you’d need to go to
[39:00] the company offices where they keep the ledger
of all the people that own a share in the
[39:03] mine, tell them “I’m selling my share
to this guy here, take me off the list and
[39:09] put his name instead.”
[39:10] Upsides: the company knows exactly who owns
what portion of the company.
[39:14] Downsides: huge pain in the ass.
[39:17] To address the fact that this was a pain in
the ass, some companies decided to embody
[39:21] the intangible rights into a tangible object,
a certificate, a piece of paper imbued with
[39:27] legal magic that says possession of the paper
is identical to possession of the legal rights,
[39:34] so that people who wanted to sell their share,
or even just a portion of their share, could
[39:38] do so by handing over the certificates.
[39:42] But that’s not a perfect system, you’ve
probably already thought of some flaws, and
[39:46] once the telephone was invented it became
its own pain in the ass.
[39:49] What do you mean I need to actually move a
box full of magic paper from Brooklyn to Manhattan?
[39:55] What a waste of time.
[39:56] Glossing over one hundred years of securities
regulations following the invention of the
[40:01] telephone and then the computer, the model
that we currently use is what’s called securities
[40:05] entitlements and beneficial ownership.
[40:08] When you buy shares via Robinhood your shares
are kept in a central depository, the Depository
[40:13] Trust and Clearing Corporation, or DTCC, with
Robinhood’s name on them, and then Robinhood
[40:19] keeps their own list of which of their clients
owns what, forming a chain of beneficial ownership.
[40:26] Now, the DTCC, the New York Stock Exchange,
NASDAQ, these are not government entities,
[40:31] they’re private corporations that are overseen
by the Securities and Exchange Commission,
[40:36] the SEC, which is part of the government.
[40:39] They are designed as self-regulating organizations.
[40:42] That’s a phrase that throws up some red
flags, but it is a term with a specific meaning.
[40:48] Designating an organisation as self-regulating
gives them some slack to do their neoliberal
[40:53] profit motive routine, subject to the approval
and oversight of the regulator.
[40:58] If they want a new toy, they can have it,
but we aren’t paying for it.
[41:02] None of this means that self-regulating orgs
or the SEC get automatic or unwavering faith,
[41:07] but it means you can’t just claim self-regulated
is synonymous with unregulated to explain
[41:15] why this vast conspiracy has invisibly rampaged
completely unchecked.
[41:21] The actual stock market and its mechanics
suck in the worst possible way: the usual
[41:27] way.
[41:28] They carry literal centuries of bad habits,
cut-corners, and self-interest.
[41:32] We didn’t end up with high-security bank
vaults full of jumbo-sized magic paper because
[41:37] it was the best system.
[41:39] The central depository model of clearing and
settlement has a lot of genuine flaws, the
[41:43] kind of stuff that fuels beef between experts
in the Uniform Commercial Code.
[41:48] “Perhaps Professor Coogan's criticism of
the amendments may really be due to the fact
[41:52] that they transfer the provisions on creation
and perfection of security interests in uncertificated
[41:57] securities from article 9 to article 8.
[42:00] Practitioners under article 9 have been known
to harbor a jealous regard for that area of
[42:05] practice which has traditionally been their
own.”
[42:09] Savage.
[42:10] All this is to say that criticisms of this
system are very easy to find, but it’s also
[42:15] very easy to misunderstand what you’re looking
at.
[42:18] The primary lens that Apes view this complex
market through is, of course, the short sale.
[42:24] Because it is the one thing they know about
the stock market it is the only thing that
[42:29] matters.
[42:30] It is made compelling by the fact that short
selling is controversial well outside Ape
[42:34] circles and has been for a very long time.
[42:37] It’s been called “blatant thuggery”
by US Congressman Dennis Hastert.
[42:41] The Malaysian Finance Ministry wanted to cane
short sellers, but “light, similar to the
[42:45] punishment carried out on juveniles.”
[42:47] During World War One, the New York Stock Exchange
imposed short selling regulations in part
[42:52] out of fear that German spies would utilise
short sales to harm the economy.
[42:57] But for Apes, who were introduced to the concept
by The Big Short, it’s a personal insult.
[43:03] Short everything that guy has touched.
[43:06] I want half a billion more in swaps.
[43:09] Short sales have the unique quirk of putting
downward pressure on the stock price by increasing
[43:14] supply, and in a sense short sales do contain
a self-fulling component.
[43:19] Now, there’s a Nobel Prize in Economics
waiting for you if you can quantify that self-fulling
[43:24] element, but for Apes the theory alone is
enough to overwhelm all other considerations.
[43:30] For them it goes to the furthest possible
extreme: short sales can kill a profitable
[43:36] company stone dead.
[43:38] When taken in combination, short selling becomes
a literal conspiracy, the act itself becomes
[43:44] financial terrorism.
[43:46] “Quite literally, whatever Retail buys,
they short.
[43:51] If an institution’s holding it, it’s not
going to get shorted.
[43:55] Why do you think Amazon became the most overpowered
merchant there is?
[43:59] I work for the company - I can tell you.
[44:01] It’s because Retail wasn’t holding it.
[44:04] So then their ticker can go up because institutions
are holding it!”
[44:07] One of the truly revolutionary moments in
the development of MOASS as a theory came
[44:11] when Apes dredged up a conspiracy theory favoured
by Dot Com companies who were convinced that
[44:17] they were being targeted for destruction by
naked short sellers.
[44:21] Naked short sales are kinda tricky to talk
about because the well of discussion is so
[44:25] poisoned by these conspiracy theorists.
[44:28] A naked short sale is when you generate a
short sale without actually borrowing a share
[44:33] first.
[44:34] It is a real thing, it is illegal and has
been for a while, people have gone to jail
[44:38] for doing it, it was a historical problem,
but not for the reasons Apes and their ilk
[44:43] claim.
[44:44] The problem is compounded by the fact that
a number of legitimate market mechanics resemble
[44:50] naked short selling if you squint.
[44:52] So there’s the real thing off over in the
corner that people go to jail for doing because,
[44:58] like, there’s evidence of their crimes,
and then there’s a fantasy version espoused
[45:04] by cranks where shadowy figures destroy companies
for profit without leaving any evidence.
[45:09] The infuriating thing is that it really kinda
doesn’t even matter because most Apes don’t
[45:14] bother to distinguish between regular short
sales and naked short sales.
[45:19] Apes start from “short sellers are the bad
guys,” and rail against anything that enables
[45:24] short selling, like stock lending which is
obviously important to short selling because
[45:29] you can’t borrow a share unless someone’s
lending them.
[45:32] Apes only rope in a crank version of naked
shorts when they eventually need to explain
[45:37] why there’s no evidence of the short position
that would need to exist in order for the
[45:42] short squeeze to still be on the table.
[45:44] So let’s walk through it.
[45:46] In mid-March of 2021, a Reddit post on r/WallStreetBets
received 22 thousand upvotes, arguing that
[45:52] the squeeze hadn’t truly ended.
[45:55] “Anybody with a brain knows that GME is
not fundamentally worth its current price
[46:00] of this post, at $215/share”
[46:03] “The main talking point across all of the
investing subreddits and news outlets, was
[46:08] the fact that GME’s short percentage reached
a height of 140%
[46:12] But what does a 140% float mean?
[46:16] Did the hedge funds short/borrow more shares
than even existed?
[46:21] Well yes, that’s called naked shorting but
it’s more complicated than that.”
[46:26] By the standards of present day theories,
this is rather quaint.
[46:30] The redditor mistakenly believed that the
short sellers had survived the squeeze by
[46:33] purchasing shares created by market makers,
whose job is to trade to customers regardless
[46:38] of whether they own the asset at the time
- mandating something resembling naked short
[46:43] selling at times.
[46:44] To the author, the excessive short interest
was clear evidence of a naked short position
[46:48] of at least 40% of the entire share count.
[46:52] That isn’t sound, in fact it misunderstands
basic mechanics of how a short sale even works.
[46:58] In this instance, we’ve exceeded 100% short
interest because buyers are blind to the intent
[47:03] of the seller.
[47:04] No new shares have been created.
[47:06] A single share can be bought, lent, and sold
short as many times in a row as there are
[47:11] parties willing to engage in the trade.
[47:13] Mere days later, an article would be discovered
from the blog OilPrice.com - your number 1
[47:18] source for your oil and energy news.
[47:20] The article reframed the GameStop incident
not as a short squeeze, nor as a retail frenzy,
[47:25] but as a skirmish between retail investors
and manipulative, illegal naked short selling.
[47:31] GameStop was the victim of a malicious short
attack - the exact same thing that is happening
[47:37] to the Canadian mining sector.
[47:39] This article would validate the Ape’s anxieties:
The buy-button wasn’t some isolated incident
[47:44] predicated on boring details about credit
and margin, this was systemic.
[47:49] Wall Street has been doing stuff like this
to companies since the Dot Com bubble.
[47:54] The squeeze needed to be killed because Apes
were on to something.
[47:59] As a conspiracy theory these narratives of
naked short attacks endure because they’re
[48:04] convenient, impossible to disprove, but there’s
also juuust enough truth to it that can’t
[48:10] be ‘debunked’ like your typical conspiracy
theory.
[48:13] To this end Apes become very concerned about
ideas of "fake ownership" and "fake shares,"
[48:20] two separate ideas with their own implications.
[48:23] You need to have real ownership of real shares.
[48:27] As demonstrated earlier the subject of what
owning a stock even is is kinda a weird mess
[48:33] built on centuries of jank, which makes it
really easy for Apes to simply describe it
[48:38] as fake ownership.
[48:41] Beneficial ownership via a broker is just
an IOU, and they’re probably lending your
[48:45] shares out to short sellers, which means
[48:50] The term "fake share" refers to numerous different
ideas and they can be used interchangeably.
[48:55] The specifics are irrelevant.
[48:56] It could be the dilutive effects of naked
shorts, mislabelled orders, rehypothecation,
[49:01] the Obligation Warehouse, the ghost of the
Stock Borrow Program, or persistent failures
[49:06] to deliver - doesn’t matter, they’ve churned
through a dozen different theories for where
[49:10] fake shares might be coming from and might
be hiding.
[49:13] For Apes, trading is like a video game, and
they’re all collectively hammering away
[49:18] to find an exploit to steal Ken Griffin’s
phat loot.
[49:21] The actual end boss that Apes are at war with
is reality.
[49:25] GameStop at this point in March is still massively
over-valued and the participants in the January
[49:31] 2021 frenzy are either cashing out some sweet
gains or cutting their losses.
[49:36] The Apes who are in really deep are convinced
that it’s going to shoot back up any day
[49:40] now, but it doesn’t.
[49:42] It’s volatile, it swings a lot on any given
day, but the ultimate trend is down, and the
[49:47] explanation they come up with is that clearly
this is because of short attacks.
[49:52] Normally short attacks are specific, identifiable
transactions made with the intent of spooking
[49:57] investors and triggering a wider sell-off.
[50:00] To Apes, they are persistent, invisible, and
need to be occurring in such high quantities
[50:05] as to defy all reason.
[50:07] Therefore, they must be occurring via naked
shorts, and the attackers are avoiding closing
[50:11] the position… somehow.
[50:14] So logically if the only reason the price
is going down is because of these short attacks
[50:19] that must mean that GameStop is accruing more
and more short interest with each one.
[50:25] The actual short Interest in GameStop peaked
at 140%, which is an astoundingly reckless
[50:31] situation and is the reason Melvin ate dirt,
but once the Ape’s ran the numbers themselves,
[50:37] they valued the “true” short interest
at over 9000%, and that number is pretty old
[50:44] at this point.
[50:45] Within a year, history would be rewritten
and it would be claimed that the catalyst
[50:49] for the GME squeeze wasn’t FOMO or memes,
it was the discovery of fake shares.
[50:57] So the idea is that there are a handful of
“real” shares lost in the slurry of fake
[51:02] shares.
[51:03] Apes need to get their hands on these “real”
shares, and how they go about this is very
[51:09] funny.
[51:10] As an example, there is a theory that stock
options require the broker to deliver a ‘real’
[51:15] share - so some Apes try to exercise out-of-the-money
options.
[51:18] They want to buy shares for more than their
current market value, deliberately losing
[51:23] money.
[51:24] That kind of behaviour is indicative of an
investor who has either made a mistake, is
[51:28] trying to manipulate the stock price, or is
just incredibly stupid - possibly all three.
[51:33] So intermediaries won’t let you do it.
[51:36] When their request is refused, Apes go nuclear
at the customer support reps, making sovereign
[51:40] citizen-esque arguments as to why it’s criminal
for them to infringe on the investor’s God-given
[51:46] right to lose money on purpose.
[51:49] But above all else, “true ownership” demands
the use of the Direct Registration System.
[51:54] DRS allows the investors ownership of a security
to be recorded in their own name on the books
[51:59] of the issuing company’s Transfer Agent.
[52:01] It exists to make this circuitous mess more
palatable by giving investors an alternative,
[52:07] and it has a few legitimate functions.
[52:09] There’s nothing ‘wrong’ with DRS as
a concept, but Apes, again, distort it to
[52:14] the point of being barely recognisable.
[52:17] Apes gravitate towards it initially as a catalyst
for MOASS, a way that they can force the hypothetical
[52:22] 9000% short interest to close, and a belief
that there’s so many fake shares in circulation
[52:29] that direct registration is the only way they’ll
be able to prove they have real shares during
[52:34] MOASS, but it very quickly evolves into a
loyalty ritual.
[52:38] “And you know it’s always tomorrow until
it’s today so I guess I’m just hodlin’
[52:43] until I get paid and I DRS.
[52:46] DRS.
[52:47] DRS.
[52:48] DRS.
[52:49] DRS.”
[52:50] The central depository model was built to
specifically enable transactions to occur
[52:57] quickly, it was built to be brutally efficient
above all else.
[53:01] DRS, by design, reintroduces inefficiency
in transferring ownership.
[53:06] It makes selling your shares more expensive,
and it’s slow: many transfer agents require
[53:11] you to send important requests by mail.
[53:14] Like, with an envelope.
[53:18] That makes it a kind of symbolic castration.
[53:20] You’re proving your conviction to the cause
by hindering your ability to sell.
[53:24] It’s community policy to keep your entire
stake in DRS - if you keep some portion of
[53:30] it with your broker it means you’re enabling
them to lend your shares to short sellers
[53:34] and commit financial terrorism, and the only
reason you would keep the shares with your
[53:38] broker is if you were planning to sell.
[53:40] You aren’t thinking of selling right?
[53:44] Having opted into DRS, the shareholder receives
mail from the transfer agent as evidence of
[53:49] their ownership.
[53:50] These letters are regularly paraded on the
subreddits, posed alongside other sacred objects
[53:55] demonstrating loyalty to the company.
[53:57] God, a lot of these have firearms.
[54:00] Somewhere within this process, the Ape ascends
to the status of a “bona fide shareholder.”
[54:04] They hold real shares, entirely locked out
of the reach of Wall Street.
[54:09] So I want you to visualize this.
[54:11] You’re hooked on watching the price of GameStop
every day.
[54:14] Whenever the price goes down, which it does
often, it’s because Ken Griffin, who orchestrated
[54:19] to kill the squeeze, is illegally naked shorting
GME in order to suppress the price, so every
[54:26] week GME continues to accumulate more and
more short interest.
[54:30] That means that every day the theoretical
payout of MOASS gets larger and larger.
[54:35] In fact the plausibility of Citadel ever willingly
closing, ever slowly winding down their position,
[54:41] grows more and more impossible.
[54:43] MOASS becomes inevitable.
[54:46] Once the conspiracy is unveiled, something
like 99% of GameStop’s shares will be revealed
[54:51] to be fake at the same time it’s revealed
that Citadel needs to buy back ninety-times
[54:56] GameStop’s value worth of GME.
[54:59] The short sellers now need to buy back “real”
shares, which are exclusively held by Apes.
[55:06] This alone would be absurd, but it gets worse.
[55:09] Under the “infinity pool” theory, Apes
will simply refuse to sell their shares.
[55:14] The supply will literally be zero, so the
ticker might as well read infinity.
[55:18] It’s just supply and demand.
[55:20] The plan is to never let the short sellers
cover their position, and hold them hostage
[55:24] in a basement and drip feed them one share
at a time, with each Ape making wife-changing
[55:29] money with each sale.
[55:31] The purported values are childish and totally
arbitrary - ranging from 10 to 500 million
[55:36] dollars per share as we’ve seen.
[55:38] The limiter on this is naturally, you know,
reality.
[55:42] Citadel can't pay infinity dollars per share
nor can they pay 10 million a share.
[55:48] But don't worry: Apes have already mapped
out how the dominos will fall.
[55:52] ““What if the unthinkable happens and
more than 60% decide to hold GME to at least
[55:56] 7 figures?
[55:57] The DTCC can only cover 67 trillion.
[56:01] What happens then?”
[56:02] “Then it goes to the Fed, Rog.
[56:03] The Fed has to turn on the printer.
[56:08] “
[56:09] Citadel will be vaporised the instant the
news breaks, and their obligations will flow
[56:12] to the central depository itself.
[56:14] A central depository has never defaulted before,
we don’t know for certain what will happen.
[56:20] But Apes have done their research and all
agree that, in the event that the DTCC goes
[56:26] bust, the first priority for compensation
will be bona fide shareholders, to the detriment
[56:31] of all others.
[56:33] Like that 67 trillion figure suggests that
the DTCC will liquidate your dad’s investment
[56:39] portfolio to buy shares in GameStop.
[56:42] Once the depository defaults we get something
resembling global financial collapse - but
[56:46] the US government still has an obligation
to compensate the redditors for their losses.
[56:51] In the pure version of MOASS, Apes take up
the mantle of God Kings of a whole new economy.
[56:57] Their new market would be blockchain-based,
trading stock as NFTs, forcing short sellers
[57:02] to track down and return specific identifiable
shares because Apes have a collective fantasy
[57:07] about being personally contacted by short
sellers begging them to sell.
[57:12] ‘MOASS realists’ argue instead that the
US government, faced with this existential
[57:16] crisis, will simply cut a deal with the Apes.
[57:19] And whether Apes ought to squeeze the White
House is a point of contention within the
[57:24] movement.
[57:25] So, to sum up.
[57:26] MOASS is an infinite money glitch, built on
the idea that Wall Street as a whole conspires
[57:31] to smother dying companies through naked short
sales.
[57:34] They do this through exploiting flaws in securities
ownership and stock lending, to produce “fake
[57:39] shares”.
[57:40] GameStop avoided its execution because redditors
intervened via a coincidence of destiny.
[57:46] And that positions GameStop as a catalyst
to unravel the greatest fraud in history - with
[57:52] a side-effect being that the US government
will hand the keys to Fort Knox to a bunch
[57:56] of redditors… as a down payment for their
shares in video game retailer GameStop.
[58:01] So, that’s the play.
[58:03] All the Apes need to do now is find evidence
of some fake shares…
[58:08] How hard can that be?
[58:09] Yeah, I’m picking up more GameStop, I’m
picking up more Bed Bath & Beyond.
[58:13] I’m super excited for Bed Bath & Beyond,
I’m seeing a lot of bullish sentiment online,
[58:19] a lot of good peer reviewed theories, some
DD.
[58:22] You know, Cohen’s still in this play, Icahn’s
in this play, we’re going to see some collaboration
[58:27] between those two.
[58:28] Icahn through Newell brands buys up Bed Bath
& Beyond.
[58:32] Spins off Buybuybaby to Cohen, he merges that
with Teddy, and that forms the foundation
[58:37] of GMErica, which lights the fuse on the rocket
for GameStop.
[58:41] So, how do you prove that fake shares exist?
[58:45] The company will tell you how many shares
they have issued, they will call it the total
[58:48] outstanding share count.
[58:50] For example, here’s GameStop’s 10Q from
June 2021 reporting 71 million, 815 thousand,
[58:57] 131 outstanding shares.
[58:59] But that is the number that is supposed to
exist.
[59:02] If you think fake shares are being introduced
into the system, that number is only useful
[59:07] to check your work.
[59:08] You have to do a share count.
[59:10] True, rigorous investigations of share counts
occur so rarely that there isn’t really
[59:15] a good comparison to draw from.
[59:17] At minimum, it’s a hugely disruptive process
that involves cooperation from basically every
[59:23] branch of the stock market.
[59:24] It’s something GameStop lacks the authority
to do themselves, and the mere mention of
[59:30] it might foster uh, ‘bearish sentiment’
- you know, suggesting to investors that their
[59:36] shares may be compromised - with no basis
for that belief.
[59:40] So it shouldn’t be surprising that, to be
the best of our knowledge, GameStop hasn’t
[59:44] acknowledged any part of the MOASS conspiracy…
[59:47] directly, wink wink nudge nudge.
[59:50] This means the Apes are on their own to expose
the conspiracy from the outside.
[59:54] The method Apes first latch onto is via shareholder
votes.
[59:58] We’ve already seen the issues that can arise
from counting shares directly from the market.
[60:02] Totally normal business transactions can resemble
illusionary shares, and it’s not possible
[60:07] to work backward to solve for the initial
share count - especially when the number you’re
[60:12] after contains an unknown amount of fake shares.
[60:15] When a shareholder loans their share for a
short sale, they are owed a share, they still
[60:19] consider themselves a shareholder, but they
lose access to their voting rights - otherwise
[60:25] you’d have one share providing two separate
votes, if not more.
[60:29] That gives you a hint of where this is headed.
[60:32] One share translates to one vote.
[60:34] So if every shareholder is involved in a vote,
the vote count should total precisely 100%
[60:39] of the outstanding share count.
[60:42] If the number exceeds 100%, that has to be
the product of naked shorts, phantom shares,
[60:47] or dodgy voting.
[60:49] Over-voting is a real thing in Corporate governance,
and it's a whole complex topic that neither
[60:54] of us want to endure.
[60:56] Thankfully the Ape theory is extremely simple.
[60:59] They aren’t trying to reveal a moderate
discrepancy in the share count - they believe
[61:03] there are dozens of times more shares in circulation
than intended, and that Apes have already
[61:09] bought far, far, far more than the 72 million
“real” shares.
[61:15] As the phrase goes “Apes already own the
float”.
[61:18] “We know we own the float!”
[61:20] Let’s set the scene here a little.
[61:22] It’s April/May 2021, MOASS as a theory is
still evolving rapidly, and GameStop has a
[61:28] corporate vote coming up on June 9th.
[61:31] Apes spend weeks whipping up support for the
vote, promoting it all over Reddit, explaining
[61:36] how to submit your vote to your broker, and
proclaiming it as an opportunity to really,
[61:41] truly, finally stick it to Wall Street, expose
the criminal naked short attacks on GameStop,
[61:47] and trigger another squeeze.
[61:49] This was such a big deal that numerous Apes
travelled to Texas to attend the shareholder
[61:54] meeting in person, and thousands of Apes tuned
in to the influencer live streams that treated
[61:59] this banal procedural vote with the gravitas
of a major political election, waiting, in
[62:06] suspense, for the results.
[62:08] [Rensole] Present– more than majority of
all shares.
[62:12] Confirmed, more than majority
[62:14] [Atobitt] So there were more shares!
[62:16] [Elle] Yes!
[62:17] They confirmed there are more shares than...
[62:20] [Atobitt] That's 100%
[62:21] [Elle] no no no, they confirmed there are
more VOTES than shares
[62:26] [Atobitt] That's what I'm saying, that's more
than 100%.
[62:29] If that's a direct quote, if you have that
and that's sourced that's it
[62:33] Because if we're saying "more than majority",
majority's just 50%
[62:37] [Elle] No no no, it wasn't majority, they
said "more votes than outstanding
[62:42] shares"
[62:43] [Atobitt] Oh ---- that's huge!
[62:44] I'm waiting for that 8-K to come out and say
[62:48] We had hundred percent...
[62:49] hundreds of percent more than what
we expected
[62:52] I'm literally expecting hundreds of percentage
more than...
[62:54] [Rensole] But then in that aspect ‘more
than a majority’ if it outsatands the float,
[62:59] it’s still more than a majority, that’s
legalese.
[63:02] [Atobitt] But it was more than a majority
last year, too.
[63:05] [Rensole] Yeah.
[63:06] So, it didn’t work, GameStop didn’t announce
that nine times as many votes were cast as
[63:11] should have even been possible, they just
kinda nodded at the fact that voter turnout
[63:15] was high.
[63:17] This is actually how DRS entered this story
in the first place!
[63:20] Dr. Susane Trimbath, or Queen Kong as the
Apes nicknamed her, has been promoting DRS
[63:25] to retail investors for thirty some odd years,
and the utility here is the same as the vote:
[63:31] since the number of shares that Apes presume
exist is some cartoonish multiple of the actual
[63:36] number it should be trivial to demonstrate,
and unlike the vote this would cut brokers
[63:41] out of the picture entirely.
[63:43] Thus began an even more intense campaign to
DRS GME and get GameStop to begin reporting
[63:50] the number of direct registered shares.
[63:53] This, this was a lock.
[63:56] Apes own the float after all, the crime is
so vast that even mediocre participation will
[64:00] expose some truly unreasonable numbers, 80
million, 90 million, 300 million directly
[64:07] registered shares in a company that only has
72 million shares to begin with, and then…
[64:14] then comes the reckoning.
[64:16] Yeah, that one didn’t pan out, either.
[64:22] Okay, so the headband, maybe I should explain
this.
[64:28] It’s an homage.
[64:31] Really everything that I do is an homage to
my hero DFV, or Deep Fucking Value.
[64:39] And at this point we need to talk about a
man named Keith Gill, an instrumental figure
[64:43] in all of this who those familiar with the
story probably feel has been conspicuously
[64:47] absent up to this point.
[64:50] This is Keith Gill aka DFV aka Roaring Kitty.
[64:54] He is simultaneously extremely important to
the Ape movement and utterly inconsequential
[64:59] to our story, and for that reason it is worth
profiling him in order to illustrate that
[65:05] contradiction.
[65:07] To some he basically invented meme stocks,
while to others he is merely the mouthpiece
[65:12] through which MOASS made itself known to the
world.
[65:15] The reality, in contrast, is almost unrecognisable.
[65:19] In our reality he is a registered securities
broker who was working by day at the insurance
[65:24] broker MassMutual.
[65:25] In his spare time he streams investment tutorials
on YouTube under the alias Roaring Kitty and
[65:31] posts on Reddit under the handle DeepFuckingValue.
[65:34] Next slide.
[65:35] It is 2019 and Keith’s hope is to become
something of an investment influencer based
[65:41] on his “roaring kitty” investment philosophy
which, as the name suggests, is a small-but-aggressive
[65:47] strategy.
[65:48] Next slide.
[65:49] As the working subject for this Keith has
a theory, inspired by a blog post written
[65:53] by Dr. Michael Burry, that GameStop is under-valued.
[65:57] The idea is pretty straightforward and honestly
rather modest: GameStop has been trending
[66:02] downwards for several years, but has historically
always seen a significant bump in value at
[66:07] the start of a new console generation, and
the ninth gen consoles are on the horizon.
[66:13] Next slide.
[66:14] While consumer habits are shifting away from
malls in general and aggressively to digital
[66:18] distribution for games in specific, and while
GameStop’s relationship with manufacturers
[66:23] and developers is no longer what it once was,
Gill’s opinion is the market is overly pessimistic
[66:29] about how much life is left in physical media.
[66:32] Long term, his view is that GameStop still
has multiple opportunities to pivot the business
[66:37] to something more forward-looking, especially
if they can expect a significant spike in
[66:42] revenue in the near future.
[66:44] This is an argument that GameStop is trading
at $4 to $8, he feels it should be trading
[66:50] at $8 to $10, and has the capability of going
reasonably higher as the ninth gen consoles
[66:56] carry the 2020 holiday season.
[66:58] That's what I think I think about game stop.
[67:00] I think it is it is at least a double I think
it is probably a triple but it legit could
[67:06] be a 45 bagger It could be looking out.
[67:10] I don't know looking out six to 18 months
or so
[67:20] Next slide.
[67:21] Of course he couldn’t have seen the coronavirus
pandemic coming, and how that would both decimate
[67:26] brick and mortar retail, with malls getting
hit particularly hard, and stress supply lines
[67:31] for both the retailers and their vendors.
[67:34] Next slide.
[67:35] Gill chips away at this thesis for over a
year, streaming about it regularly, posting
[67:40] stream highlights as standalone videos, and
defending and refining the thesis in discussions
[67:44] with other traders on Reddit, even as the
situation looks ever more dire for GameStop
[67:50] as the ninth gen console launch is set to
be hammered by problems all the way up and
[67:54] down the chain from raw materials to shipping
stoppages.
[67:58] Next slide.
[67:59] However as the meme stock craze takes root,
and in particular identifies GameStop’s
[68:04] unusually high short interest as a possible
squeeze play, Keith is already pretty deep
[68:10] in on GameStop and willing to ride it out,
for which he is rewarded pretty handsomely.
[68:16] Here is Keith on Christmas Day, 2020 discussing
GameStop breaking his original optimistic
[68:21] price target of $20.
[68:23] Hey, what's up everybody?
[68:25] Cheers!
[68:26] Happy Friday, happy holidays.
[68:27] I hope everyone's having a great week.
[68:30] Surprise!(...)
[68:31] Game stops up about 5x from when I uploaded
those videos over the summer, so that's great
[68:37] to see.
[68:38] When you have a thesis and by and large it
unfolds as you hope that it could.(...)
[68:41] That's nice, so it shouldn't be taken for
granted.
[68:44] It doesn't always happen, so that's great.
[68:47] And yeah, it's just to clear up some potential
misconceptions.
[68:51] This was a true YOLO for me.
[68:54] When I was building this position last year,
we had nowhere close to a million dollars.
[68:59] I certainly do not drive a Lambo.
[69:01] We rent this house that you see, so it's been
a wild ride for us as a family.(...)
[69:09] And it has been just so much fun to experience
that with you over the past couple of months.
[69:13] I hope you had some fun as well, and maybe
if you even picked up on some educational
[69:19] elements along the way, all the better.
[69:21] But it has brought me tremendous joy to just
share in this what has turned out to be a
[69:25] bit of a case study, as some of us feel, and
it has brought me tremendous joy.
[69:30] And if you have had a good time as well, that
makes me feel great.
[69:34] Next slide.
[69:35] When all was said and done at the end of January
Keith quit his job and took home an estimated
[69:39] $25 million, for which Maxine Waters hauled
his ass in front of congress to answer some
[69:45] questions about what the hell happened and
if, you know, he maybe did a bit of a pump
[69:51] and dump.
[69:52] Next slide.
[69:53] Keith, accurately in my opinion, insisted
that while he was a higher profile member
[69:58] of the wave he was ultimately just another
member of a decentralised movement and, demonstrably,
[70:04] had been personally advocating GameStop as
a potentially profitable move for well over
[70:09] a year.
[70:10] “I also want to say that I support retail
investors’ right to invest in what they
[70:15] want when they want.
[70:17] I support the right of individuals to send
a message based on how they invest.
[70:22] As for me, I like the stock.
[70:24] I’m as bullish as I’ve ever been on a
potential turnaround for GameStop, and I remain
[70:28] invested in the company.
[70:30] Thank you.
[70:32] Cheers everyone.
[70:33] Next slide.
[70:34] Apes read literally all of this as coded messaging.
[70:38] “I like the stock” became a shibboleth
to signal commitment to the cause of MOASS.
[70:44] Next slide.
[70:45] Gill read the room and wisely peaced out.
[70:47] While he continued to participate in the scene
at an arm’s length, tweeting vague nonsense
[70:52] mostly in the form of movie clips, the length
of that arm grew longer and longer as Apes
[70:58] grew increasingly disconnected from reality.
[71:01] Realizing that he was being elected to the
role of cult leader, that anything he said,
[71:06] any company he commented on, would be baked
and decoded as directions for the Apes to
[71:11] take action on, and that such a position posed
a substantial threat to both his newfound
[71:16] wealth and his personal safety should he fall
afoul of either the SEC or the Apes themselves,
[71:22] in late June of 2021 he unplugged his social
media entirely and disappeared from the public
[71:27] eye.
[71:28] Next slide.
[71:30] Gill has been retroactively recruited into
every twist and turn in the evolving Ape lore.
[71:36] Everything that Apes convinced themselves
about naked shorts, married puts, the importance
[71:40] of failures-to-deliver, the need to DRS, has
been imposed on Gill in-absentia.
[71:45] Here, for example, is a post from 2023, just
shy of two full years after Keith’s last
[71:53] public post, that outright advocates for conspiratorial
baking, “refine your tinfoil until it’s
[72:00] pure gold”, and assumes absolute homogeneity
between Keith’s thesis and their own, which
[72:07] is to say that this poster believes DFV believes
what they believe.
[72:14] Next slide.
[72:15] The poster signs off, of course, with “follow
the white rabbit.”
[72:19] Next slide
[72:21] Although he almost certainly sold most if
not all of his stake in GameStop and rode
[72:25] off into early retirement to raise his family,
Apes remain convinced that he’s still out
[72:30] there hodling to this day, cheering them on
from afar, if not guiding them from the shadows
[72:37] via Reddit awards.
[72:40] “Can you verify that that’s a thing?”
[72:48] “Can I prove that DRS works?”
[72:49] “Yeah”
[72:50] “Well DRS has never been disproven.
[72:52] We just gotta, we just gotta trust the plan.”
[72:56] One of the things that gets litigated repeatedly
in all this mess is the definition of what
[73:00] makes a meme stock.
[73:02] I’ve actually got a conspiracy-laden email
in my inbox that hinges off this.
[73:06] In January 2021, there was no such thing as
a 'meme stock.'
[73:12] Despite the SEC itself putting out a report
(where they directly state that price movement
[73:17] was not related to shorts closing), there
continues to be no definition of what a 'meme
[73:22] stock' really is.
[73:24] However, examples of meme securities apparently
include GME, AMC, and BBBY.
[73:31] The term 'meme stock' in reference to GME
seems like a tactical decision to deride GME
[73:38] investors without directly singling out a
single company, ostensibly in order to avoid
[73:43] bringing more attention to the company whose
success is immediately threatening to financial
[73:48] institutions.
[73:50] On one hand “meme stock” is basically
the new name for stocks that behave like penny
[73:54] stocks even if they aren’t penny stocks,
which is useful to a degree, and on the other
[73:59] hand is an attempt at identifying the why
of meme stocks via a definition.
[74:06] Bed Bath and Beyond, in an April 2023 court
filing, list a couple characteristics of a
[74:10] meme stock and why they felt it applied to
them.
[74:13] The two characteristics that they identify
are a general narrative of an imperilled company,
[74:18] and nostalgia value.
[74:20] That’s kinda a workable definition, but
to cut through the noise part of the problem
[74:25] with trying to pin down what a meme stock
is is that it’s changed.
[74:29] A meme stock in May 2023 isn’t the same
substance as a meme stock in 2021.
[74:35] The original meme stocks in the fall of 2020,
AMC, Nokia, GameStop, are defined by a gleeful
[74:43] contrarianism.
[74:44] It’s not that there’s a narrative of a
company in trouble, though that is present,
[74:49] and it’s not the nostalgia value, though
that’s present too.
[74:54] Those were not the leading motives; what makes
a meme stock is that aggressively, publicly
[75:01] buying stock in a failing company past its
relevance is funny.
[75:06] The thing that truly separates a meme stock
from every other garbage ticker is that the
[75:11] act of buying in and of itself becomes the
meme, a combination of absurdist performance
[75:17] and inherently gamified exercise.
[75:19] As more and more people start piling in it
causes the price to go up, and that basic
[75:21] cause and effect, as simple and abstract as
it is, can be deeply entertaining.
[75:22] In 2023, though, that wave has crested and
broken, the joke is over, but the investors
[75:26] are still around, and, as we’ll see, the
gleeful contrarianism is gone, replaced with
[75:32] stone-faced dedication to a perceived cause.
[75:35] So what is a meme stock?
[75:38] It’s a stock whose play rests entirely on
a concocted narrative of a storied American
[75:43] company under assault that serves as a proxy
battleground for the fate of the American
[75:48] economy, the vessel through which the true
believers will manifest their apocalypse and
[75:53] rebirth the world into a golden age.
[75:56] It is a stock that is a candidate for MOASS.
[75:59] While any stock with a high short interest
potentially meets this criteria, ultimately
[76:04] three businesses would rise to the top to
become the canon meme stocks: GameStop, AMC
[76:09] Theatres, and Bed Bath and Beyond.
[76:12] Now, companies tend to have high short interest
because they’re in bad shape: declining
[76:17] market share, lacklustre product, poor reputation,
loaded with debt, and, probably the number
[76:22] one reason, they’re unprofitable and not
making money.
[76:26] So it’s important to note that the self-selection
process here, the thought process created
[76:31] by the theory of MOASS, is going to intrinsically
lead Apes to invest in bad companies.
[76:38] “Yeah, so I’ve thought about putting one
of these together, I’ve thought about writing
[76:42] a DD.
[76:43] I mean, like, check out all of these awards
that you get.
[76:46] It’s pretty long, but that’s good, right.
[76:49] The longer it is the more due the diligence.”
[76:53] Following the vote, the Apes were faced with
their own fork in the road.
[76:56] Either they accept the results of their own
test, and acknowledge the prospect that they
[77:00] made a mistake, or they preheat the oven and
prepare to bake justifications for why the
[77:05] overvote didn’t occur.
[77:07] You don’t need to be told which way they
went.
[77:10] After the June 2021 shareholder meeting there
was a seismic shift in the tone of Superstonk
[77:15] - the goalposts shifted and damage control
was engaged.
[77:20] Immediately it began to circulate that an
overvote was never going to be unveiled by
[77:24] the meeting, and it was in fact foolish to
expect it to.
[77:28] Conspiracy theories formed to explain the
lack of evidence of the conspiracy theory.
[77:32] Some Apes were prevented from voting, brokers
normalized their vote counts before providing
[77:36] them to GameStop.
[77:38] GameStop isn’t allowed to admit the overvote
occurred.
[77:42] Whatever explains away the negative test result.
[77:45] The previous months of research became shockingly
malleable, being rewritten the instant it
[77:49] produced an unfavourable result.
[77:52] And within a few months history had just been
straight up rewritten.
[77:56] The experiment did demonstrate the overvote,
but nothing came of it.
[78:01] This is Ape “research”, and it’s worth
an examination in its own right.
[78:05] Due diligence is the process of gathering
a folio of data on a potential investment
[78:10] that explores the whole package: the company’s
financials, the state of their competition,
[78:15] likely technological or societal changes in
the near future that could impact the course
[78:20] of the company for better or worse, how many
people on the planet even theoretically want
[78:26] their product, it can get as intense as hiring
someone to drive out into the woods just to
[78:32] make sure a mine actually exists.
[78:35] Because this is a real thing that real investors
do with a very fancy sounding name it quickly
[78:40] became an entire genre of post on Ape forums.
[78:43] There is a delicate line for us to walk here.
[78:47] Learning and collaboration are… good.
[78:50] I would love to stand here and tell you that
Apes came together and taught themselves how
[78:54] to invest and better each other’s lives.
[78:56] It’s a great story, indeed that’s how
the Apes tell it.
[79:00] But this is not that, this is something very
different.
[79:05] Making money on the stock market isn’t ‘difficult’
- a fish can do it, no one going long on biotech
[79:12] has a plan.
[79:13] But Apes don’t want portfolios that outperform
the market, they want to manufacture events
[79:18] that cripple financial institutions while
flipping off regulators.
[79:23] Ape Due Diligence, or DD for short, is uh,
it’s rough.
[79:29] It is mythology cloaked in the veil of research.
[79:32] At the base layer the first generation of
Apes have self-selected as victims of a pump
[79:36] and dump.
[79:37] It’s a bad starting point, because these
people have demonstrated a lack of familiarity
[79:42] with the subject matter and poor judgement.
[79:45] Like a lot of victims of stock scams, many
of them were denied a good education, and
[79:49] many have a poor grasp of English.
[79:52] As a collective group they were weaned on
Keith Gill’s YouTube channel, daily discussion
[79:56] threads on WallStreetBets and very simple
rhetorical signals.
[80:00] That’s the kind of material they’re trained
to take in, and they still largely took it
[80:04] in by declaring “I’m just a smooth brained
ape, can someone with a few wrinkles explain
[80:09] if my tits should be jacked?”
[80:11] Rhetoric and the broad strokes are what matter.
[80:14] You need to understand that shorts never closed,
you gotta book rather than plan, and you need
[80:18] to hate Ken Griffin with every atom of your
being.
[80:20] But paradoxically, Apes sincerely believe
they are collectively the Michael Burry in
[80:25] a sequel to the Big Short that has yet to
be written.
[80:28] So while the details are irrelevant, they
are driven to not just research, but produce
[80:34] their own original research.
[80:36] The majority of this early ‘seminal DD’
was written by Apes who joined the community
[80:41] well after January - many being verifiable
bagholders.
[80:46] People who would be writing essays on securities
fraud within two weeks of making their first
[80:51] trade.
[80:52] We know this because the authors will just
flat out say it - posts will often open with
[80:58] a short summary of why the author shouldn’t
be trusted.
[81:02] They will often admit that they barely understand
the documents they’re paraphrasing, but
[81:07] have attempted it anyway for the benefit of
the community.
[81:10] The pitfalls are obvious.
[81:13] Like your standard breed of crackpot, Apes
are educating themselves to specifically solve
[81:18] a big problem.
[81:19] They are pursuing their chicken tenders.
[81:22] When they skipped the first 3 textbooks on
Finance and went straight to short squeezing
[81:27] Melvin Capital, they skipped over some fundamentals.
[81:30] But you won’t find Ken Griffin’s secret
strategy in an open access course on risk
[81:35] management.
[81:36] Rather than backtrack, Apes forged ahead into
increasingly complex and obtuse material looking
[81:41] for “the truth”.
[81:43] Like, some of the crap we had to read.
[81:46] “Furthermore the lender is being asked to
accept a new type of security interest, not
[81:50] the simple pledge, but one which perforce
has to be a security interest in intangible
[81:56] property.
[81:57] The history of developing new security interests
in purely intangible property is one that
[82:02] might give pause to even that rara avis, the
adventuresome lender.”
[82:06] When dealing with documents this intense,
written by and for professionals, the only
[82:11] way a layman can deal with it is through decoding
techniques.
[82:16] You pull out a fragment of a lecture or thesis
that you can make sense of and treat it as
[82:21] the diamond in the rough.
[82:23] The rest is interpreted through speculation
rippling out from that fragment.
[82:27] It’s a very unsound way to approach research
- and these people then immediately present
[82:34] to the class.
[82:36] Analogy is a favourite of the Ape Author.
[82:38] Analogy in academia is used to bolster the
substance - but since the Apes were introduced
[82:43] to these ideas through the Big Short, analogies
are load-bearing.
[82:47] Essentially using the same language as Margot
Robbie, but you’re expected to act on it.
[82:53] It’s not just lightly-informative entertainment,
it is in fact financial advice.
[82:59] If the rocket is launched without preparation
it will bring down the whole fucking base.
[83:03] While the small explosives are going off and
smaller players are going under, GME will
[83:07] have a lot more volatility.
[83:08] The powers that be will try to dampen that
volatility as much as possible since even
[83:13] a small ignition could set this bitch off.
[83:16] I believe the plan is to do controlled detonations
until GME is the only explosive left to set
[83:22] off.
[83:23] ComputerShare works a bit like a heat lamp,
and what that actually means is an exercise
[83:28] for the reader.
[83:29] Their thought process is so shamefully reverse
engineered that they need to make a joke out
[83:33] of the confirmation bias just to guard against
that very real criticism.
[83:38] And it needs to be repeated; an unbelievable
amount of the primary sources for the mechanics
[83:41] of clearing and settlement come from random
emails to the SEC from 2003.
[83:47] Like, even if you presume that material is
accurate - consider all the obvious ways that
[83:55] a public comment on an upcoming piece of legislation
could be unreliable twenty years after the
[84:03] legislation has been introduced.
[84:05] That is how you get the Apes frothing over
long-retired systems.
[84:09] They jumped in a time machine from the 2020s
back to 2004 when we had the last hysteria
[84:14] about naked short selling, which itself was
built off a half-baked understanding of the
[84:20] subject from the 80s.
[84:22] This leaves… gaps.
[84:25] The result of all of this is a truly specular
rate of generational decay in the Ape’s
[84:30] collective understanding of the thing they
have devoted their lives to understanding.
[84:36] Despite becoming an increasingly ambitious
ploy, MOASS devolved into an incredibly simple
[84:41] scheme in just a few weeks.
[84:43] You just buy GameStop shares and hold until
MOASS - and the infinity pool will ensure
[84:49] you become a gorillionaire.
[84:50] Ape DD can only function to reproduce existing
ideas, or to develop new mythology in reaction
[84:57] to new issues.
[84:59] Even the papers that look like they’re doing
the maths boil down to ‘buy and hold’.
[85:03] It's bad practice to cite a date or price
for the MOASS, so the only accepted values
[85:09] are 'soon' and 'infinite'.
[85:12] And all of this is regulated by the mechanism
of social media.
[85:16] Some of this may be evoking memories of QAnon,
and while the overlap between the two movements
[85:20] is non-trivial, for the most part it is simply
that as a social media driven phenomenon,
[85:26] its ideas are shaped by populism and Reddit’s
algorithm.
[85:30] DD that the community approves of is showered
with Reddit awards, praise, and clout, so
[85:36] there’s an incentive, emotional and in some
cases monetary, to, you know, have more DD.
[85:43] Atobitt was a late-arrival to the squeeze,
the account’s first post was on the 10th
[85:48] of March, and by the 14th he posted his first
amateur securities fraud essay.
[85:53] By April 22 he posted the first in a series
called “House of Cards” that Apes pumped
[85:59] to the point that it was temporarily the top
post on Reddit.
[86:04] And naturally it is almost entirely gawking
at emails from 2003.
[86:09] Atobitt was conferred a level of status that
would see him named alongside the Queen Kong
[86:14] herself as among the movements most prestigious
thinkers.
[86:18] He became something of an influencer, complete
with his own perpetually unfinished magnum
[86:23] opus, which tragically we will never get.
[86:26] He didn’t acquire this reputation through
good work, he did that by giving the Apes
[86:31] what they wanted.
[86:33] For DD to be accepted, it needs to be simple.
[86:36] It can be long, but the whole thing needs
to be fully summarised in 100 words, max.
[86:42] Because the most important thing is that it
needs to reinforce the existing belief system
[86:47] - and no one will read your DD if you don’t
tell them you agree with them at the outset.
[86:54] All of this is enforced through the upvote
button.
[86:56] DD that meets the community's criteria gets
elevated, DD that muddies the water, or worse,
[87:02] spreads fear, uncertainty, and doubt, is aggressively
suppressed.
[87:07] Regardless of the rigour of any individual
essay, this is academia via populism.
[87:12] It is the ideal circumstances for critical
thought to be suspended.
[87:17] The Apes get to pick and choose what facts
shape their thesis - and in doing so, they
[87:23] create mythology.
[87:24] This is why the MOASS theory can stand tall
on a foundation of sand and vapour.
[87:29] The actual mechanics are interchangeable.
[87:32] Initially they misunderstood how 140% short
interest could occur, that led them to the
[87:37] Stock Borrow Program, and while it proved
their original theory wrong, it gave them
[87:42] a better alternative.
[87:43] Even though the stock borrow program is baked
into the core thesis, it doesn’t matter
[87:48] - they can substitute it with at least half
a dozen different things.
[87:51] The failure of the overvote just proves how
rigged the system truly is.
[87:56] Each theory is just a stepping stone to the
next.
[87:59] They can never be proven wrong if they never
sit still long enough for someone to debunk
[88:04] them.
[88:05] Real due diligence is as much an argument
to stay away from an investment as it is an
[88:09] argument to buy in.
[88:11] Good due diligence will argue the worst case
scenario, what if things go completely wrong,
[88:16] what if a new product just sucks ass and no
one wants it, can the company weather bad
[88:21] news or will it fold in half?
[88:24] Ape DD exists to keep MOASS alive.
[88:28] As time went on, decoding became a more and
more explicit form of DD.
[88:33] This started innocently enough initially.
[88:36] Keith Gill, Ryan Cohen and Michael Burry were
subtweeting Apes very explicitly.
[88:42] Whether it was Ryan Cohen’s official statements
thanking retail investors for their support,
[88:46] or Gill communicating with Apes through gifs
- these were thinly veiled messages to Apes,
[88:52] but they weren’t substantive.
[88:54] There was not a deep meaning to Ryan Cohen
tweeting a fist emoji or reposting an Ape
[88:59] meme about himself.
[89:01] But this normalised the idea that these figures
communicated with Apes through secret messages.
[89:08] And since these guys were never available
to clarify or disprove theories, it cultivated
[89:13] decoding techniques that grew more and more…
[89:19] let’s say ambitious.
[89:21] “DFV Roaring Kitty tweet Deciphered!!
[89:22] 1627 has to do with Naked Shorting Options
Derivative cases, which ties directly in which
[89:29] SEC rule 10b-21”
[89:31] “Can you explain the connection just so
my dumb ass can follow?”
[89:35] “All I am coming up with is a couple of
legal cases, beyond that, I dunno.”
[89:39] “Are we saying this painting is from 1627?
[89:42] “This painting is from a Wes Anderson movie.”
[89:45] “But the roman numeral on the right side
is for 1627.”
[89:49] “How’s that tied to naked shorting?
[89:51] “GME, Rick and Morty.
[89:53] How the show might be hinting at us about
the financial system and the collapse of citadel
[89:57] via their own greed.”
[89:58] “This is how the 1% sees us.”
[90:01] “Candidly I’ve seen no evidence so-called
fake or synthetic shares exist.
[90:06] But many of you disagree…”
[90:08] “I love it.
[90:11] Basically saying, “Who am I to say the hedge
funds are creating shares out of thin air?
[90:15] I guess we’ll just pull back the curtain
to see”
[90:17] “Adam Aron saying there’s no evidence
of synthetics is actually genius.
[90:23] Just think about it, when he does pounce,
they can go after him for market manipulation.
[90:27] Because he’ll have evidence of the exact
opposite…”
[90:31] “To a person with @uti$m, words mean something.
[90:35] Every word does.
[90:37] Every symbol.... every unwritten, suggestive
wink or nudge.
[90:41] We're really good at giving clues and seeing
deeper meaning (I say we because I have a$perg's).
[90:47] We notice patterns and algorithms that normal
people don't.
[90:51] And cryptic language is often our bread and
butter.
[90:54] Yes, DFV, MJBurry, even Papa Cohen are communicating
with apes the only way they can... through
[91:03] cryptic means.
[91:04] And their messages are important.
[91:07] Remember...
[91:08] every word means something to an @uti$t.”
[91:11] No surprise that by June, Keith Gill stopped
tweeting all together.
[91:16] It got to the point where AMC CEO Adam Aron
dropped his phone and tweeted out a single
[91:21] “M”, and Apes became fixated on decoding
it.
[91:24] Despite Aron’s efforts to dispel the fervour,
Aron’s statements just fed into the idea
[91:31] that the M was significant.
[91:33] “Yesterday I tweeted an “M” by mistake,
but many of you thought I was being less than
[91:38] candid in the denial, and that the M must
have meant something.
[91:42] Nope, just a tweeting error.
[91:44] But today I am tweeting this, and it does
mean something: “Y””
[91:50] “Question for the tin-foils: why did he
leave that much space (what is it, 10?) between
[91:57] text and "Y"?”
[91:58] “I think it’s 11.
[92:00] Can’t figure it out.”
[92:02] Ryan Cohen, the chairman of the board of GameStop,
took one photo with notorious corporate raider
[92:07] Carl Icahn, the guy Oliver Stone based Gordon
“greed is good” Gekko off of in 1987,
[92:12] which immediately cast Icahn as a saviour
figure in dozens and dozens of DDs.
[92:20] As conspiratorial techniques like this became
more popular and more dominant on these boards,
[92:25] the line between ‘vetted DD’ and ‘speculation’
began to blur.
[92:30] Now, the “solid AF DD” was already often
built on the same foundation of sand as outright
[92:36] speculation, but there was a clear shift over
time.
[92:40] After the failed shareholder vote, naturally
more and more radical explanations were required.
[92:46] All of these exist to answer the same question,
where’s the evidence of the fake shares?
[92:52] Why aren’t we seeing the answer we expect
to see?
[92:56] The answer is almost always that the debt
or shares were shifted into some new form
[93:00] previously unknown to Apes.
[93:02] Since the Ape understanding of the market
is rooted very firmly in the realm of googling
[93:06] “wrinkle brain explains short squeeze”,
that is most things.
[93:12] So we start to see more and more out-there
instruments being introduced, they start talking
[93:16] about dark pools, options, ETFs and so on,
folding that material into a more and more
[93:22] pure thesis based on the naked short conspiracy.
[93:25] Maintaining a stable community built entirely
out of conspiracy, insecurity, and resentment
[93:30] is tricky.
[93:32] To get them through this Apes police sentiment
like few others.
[93:36] Even crypto, a product wholly at the mercy
of sentiment, is more tolerant of bad news
[93:42] than Apes because they are nominally willing
to engage with reality as it exists.
[93:48] They’ll spin bad news like the collapse
of FTX as good for the ecosystem as a whole,
[93:54] pretending that it’s culling out bad actors,
but they don’t deny that FTX has gone sour.
[94:00] Since MOASS is basically a fantasy untethered
from any real business fundamentals, the reasons
[94:06] to not buy in get longer and longer as time
goes on, and so the restrictions on what is
[94:12] and isn’t permissible to talk about also
grow longer and longer.
[94:17] MOASS is, when you break it down, market manipulation
via the prisoner’s dilemma.
[94:23] The big, theoretical payout only works if
literally everyone holds the line, but simultaneously
[94:30] everyone involved has both the personal incentive
and ample opportunity to screw over the others,
[94:36] and knows that everyone else has that same
opportunity.
[94:40] It is a philosophy that demands extremely
strict orthodoxy.
[94:45] You buy and you hold.
[94:47] Discussing exit strategy is derided as “price
anchoring.”
[94:51] Remember, the gains are not theoretically
infinite, they are literally infinite.
[94:56] This leads directly to unhinged memes about
Apes becoming “gorillionaires” from selling
[95:01] one single share.
[95:03] It leads to stories about the post-MOASS world
where Apes don’t actually need to sell any
[95:08] shares at all ever, they just live off the
dividends from GameStop for the rest of their
[95:14] lives, and for the lives of their children,
and their children’s children, a future
[95:18] where one, single share confers wife-changing
generational wealth.
[95:22] Sharp eared listeners may have noticed that
I said “dividend” in there, and they may
[95:26] be asking the logical follow up question “where
does the money for these dividends come from?”
[95:30] Don’t worry about it.
[95:31] In fact, why are you so concerned with what
other people do with their money?
[95:34] Are you just here to spread FUD and undermine
GME?
[95:37] I’m just an individual investor who likes
the stock and the company that is debt-free
[95:41] and cash-flow-positive backed by an unprecedented
movement from shareholders to direct register
[95:46] their shares in order to combat corruption
in the DTCC.
[95:50] FUD is literally anything that casts any amount
of doubt on any part of the plan.
[95:55] “I don’t believe that GME will be worth
an unlimited amount of money per share, that
[96:00] doesn’t seem possible.”
[96:02] FUD!
[96:03] “Why wouldn’t the price peak and then
come back down?”
[96:05] FUD!
[96:06] “I should probably set an exit threshold
because I’m pretty sure other people are
[96:10] going to be selling, too, and I don’t want
to miss the opportunity.”
[96:14] FUD!
[96:15] “No, but for real, where does the money
for these dividends come from?”
[96:18] FUD FUD FUD FUD!
[96:19] Direct registration mutated extremely quickly
from an attempt at proving the existence of
[96:24] concrete crimes with objective numbers, a
thing it failed to do, into a loyalty ritual,
[96:31] a spell that if executed correctly would create
the conditions that would allow MOASS to happen.
[96:38] A specific quirk of the narrative of MOASS,
the idea that the Apes are engaged in a phantom
[96:43] war with the short hedge funds, leads to various
delusional, but logically consistent outcomes,
[96:50] like the belief that anyone who is not on
board with the play is a hired agent of the
[96:54] opposition.
[96:55] The rubberneckers mocking Apes on r/GME_meltdown
aren’t merely trolls, contrarians, or naysayers,
[97:02] but hired “shills” planted in Ape communities
as part of an elaborate psyops to undermine
[97:07] them and convince them to sell their shares
so that the shorts can cover, which is of
[97:12] course predicated on the belief that there’s
no real shares available, which is predicated
[97:16] on the belief that there’s some truly unfathomable
amount of undetectable naked shorts, which
[97:21] et cetera, et cetera, et cetera.
[97:23] This is a clever word inversion.
[97:25] An actual shill is someone who stands off
to the side of a grift and acts as an unrelated
[97:30] hype man.
[97:31] They posture as just a random independent
passerby while actually having an undisclosed
[97:36] interest in the thing that they are helping
to sell.
[97:39] A shill wants you to buy something.
[97:43] Naturally, SuperStonk and the other derivative
forums are deeply infested with shills literally
[97:47] telling people to buy and promoting the virtue
of never, ever selling for any reason, ever.
[97:53] Here’s a DD post literally structured for
recruitment from Reddit’s front page.
[97:57] The reason the DD posts have so many awards
is because Apes believed they could abuse
[98:02] the system to shill GME to r/All.
[98:06] They’re not coordinating, though.
[98:08] They’re all just individual investors coming
to their own conclusions about what to do
[98:13] with their Reddit awards.
[98:15] In light of the community being 98% shilling
by volume, it became culturally expedient
[98:20] to re-define the word so that all the shills
would stop being accurately called shills.
[98:26] So in Ape circles a “shill” is any unbeliever.
[98:32] Predictably this arrangement where anyone
who isn’t frothingly committed to the cause
[98:36] is a hired shill fosters an air of paranoia
and has a rather extreme chilling effect on
[98:41] the idea of, you know, asking very reasonable
questions that would be extremely normal in
[98:48] any other investment forum.
[98:50] This paranoia extends to policing maintenance
of the illusion that this is all just an organic,
[98:55] uncoordinated series of individual decisions.
[98:59] “Everyone’s like ‘I wanna make a lot
of money let me do a bunch of research’
[99:01] And it’s like aye here’s what I found’
and like ‘yeah me too’ yeah me too yeah
[99:06] me too yeah me too - and then like we realise
oh crap all the predictions we made as a group…
[99:11] individually then as a group confirmed and
vetted and picked apart and the best rose
[99:16] to the top and that’s how you get research,
it’s like the perfect experiment…”
[99:24] This both feeds the narrative that their behaviour
is not a “mass hypnosis” but is instead
[99:29] the product of genuine rigour.
[99:31] And this has the added bonus of providing
a basis to deter accusations of market manipulation.
[99:36] Now, while it’s true that it’s unlikely
that we’ll see a RICO filed with 20,000
[99:41] John Doe defendants- Apes seem aware that
they're playing close to the fire.
[99:46] They are looking to collectively engineer
an artificial price movement which would absolutely
[99:52] get you in trouble if you did it solo, so
they lean into the decentralised nature of
[99:57] the movement as best they can, and it’s
- it’s very funny.
[100:02] “Edit 2: Removed some “we”s etc from
my exit strategy after concerns were raised
[100:07] that phrasing my exit strategy like I originally
did might be construed as attempted market
[100:12] manipulation.
[100:13] In the end, anyone reading this is just an
individual ape doing whatever they want with
[100:17] their own money.”
[100:19] Users will incant “this is not financial
advice” and “I just like the stock”
[100:23] with the same energy as “no copyright infringement
intended” in the description of a complete
[100:29] upload of Dances With Wolves to YouTube.
[100:31] “This is not financial advice, legal advice.
[100:33] For entertainment purposes only.
[100:34] Anything I say is my personal opinion please
do not make any financial decision based on
[100:38] anything I say in these videos that being
said hit the like button, subscribe button,
[100:45] all that the YouTube algorithm stuff so you
get the vids when I put ‘em out…”
[100:52] “GameStop is operating smarter than ever
before.
[100:55] And that’s what people just don’t understand
yet, and it’s because of all the mainstream
[101:01] media FUD - and that’s just why I think
the Mother of All Short Squeezes is inevitable.
[101:06] Of course, this is just my opinion.
[101:08] You literally should take my opinion with
a grain of salt.
[101:11] I’m telling you a stock is gonna go way
up because a lot of people like it - and I’m
[101:15] literally just a guy on the internet, why
would you believe me?”
[101:18] They don’t collude, instead there’s an
abstract “infinity pool” that happens
[101:23] to describe the abstract notion of shares
that will never be sold.
[101:27] It speaks to their insecurity on whether they’re
safe to be doing this, and that concern is
[101:32] probably well-founded.
[101:33] Because sure, the US government wrote off
the GME squeeze as a one-off viral event and
[101:38] let everyone off the hook, but if the Apes
get their wish and really do deliberately
[101:43] risk collapsing the US or global economy after
several years of organising - yeah I think
[101:51] the US federal government would sooner make
that RICO filing then give u/hoplias literally
[101:57] billions of dollars for his shares in GameStop.
[102:00] The whole of Ape culture is persuasive in
no small part because of how it plays off
[102:04] existing social anxieties.
[102:06] We are collectively primed for these narratives
by a complicated soup of messages, a combination
[102:13] of distrust in financial institutions married
with a mythologization of the stock market
[102:18] and a financial reality of stagnant wages
and greedflation that make it feel like playing
[102:24] the market is the only possible way to build
any kind of wealth or comfort.
[102:29] And that’s just the stuff that’s rooted
in reality.
[102:32] Ape motivations are ultimately pretty simple.
[102:34] Their lore is complex, but their reasons are
not.
[102:37] They’re gambling addicts who are starved
for social attention.
[102:40] The whole meme stock ecosystem actually makes
a ton of sense for why it’s as motivating
[102:45] as it is, since it combines all the addictive
highs of gambling with all the energy of a
[102:50] soap opera.
[102:51] Every day there’s something new, there’s
the constant drama of the price action ups
[102:56] and downs, though mostly downs.
[102:59] If it’s not price action then it’s new
theories, new DD, new moderator drama.
[103:05] It’s very easy to compartmentalize as entertainment,
to forget that what’s at stake is, you know,
[103:12] the family finances.
[103:14] Money is really easy to abstract away at the
best of times, and it only gets easier when
[103:20] it’s reduced and gamified and when so much
of it is irony-poisoned performance.
[103:25] Apps like Robinhood have already come under
criticism for their gamification of playing
[103:30] the market, but even if that weren’t a factor
the Apes are more than happy to gamify things
[103:35] for one another and frame everything in the
language of video games, the language of boss
[103:41] fights, grinding, and completionism.
[103:44] That’s already addictive, and it just upgrades
to weapons-grade bad times when combined with
[103:50] conspiratorial mindsets and the attendant
narcissism, paranoiam and over-confidence.
[103:55] Gordon Pennycook, an associate professor at
the University of Regina, in his pre-publication
[104:01] paper Overconfidently Conspiratorial, argues
that the actual defining trait of the conspiratorially
[104:07] minded isn’t narcissism or a need to feel
special, though those are observably common
[104:12] traits in conspiracy circles, but excessive
over-confidence.
[104:17] This is anecdotally intuitive to anyone who
has spent significant time in conspiracy circles,
[104:23] but it is this overconfidence that leads to
the refusal to reevaluate beliefs, the assumption
[104:29] that they accurately understand complicated
systems better than others, and, this is to
[104:34] me the most interesting claim of the paper,
a counter-intuitive belief that their opinion
[104:39] is, in fact, in the majority.
[104:42] The entire thing with Apes policing negative
sentiment is actually a pretty good example
[104:46] of that, in the way that they have an itchy
trigger finger for calling anyone, even long
[104:51] time DD writers, a paid shill if they say
anything negative or disagree with a favoured
[104:57] theory.
[104:58] In the Ape mind the only possible reason to
express doubt that GameStop is being attacked
[105:03] by short sellers who are trying to kill the
company in order to prevent MOASS is because
[105:09] you’re being paid to.
[105:10] The Ape thesis is, to them, so self-evident,
so persuasive, that it’s just common sense,
[105:18] everyone already believes it.
[105:20] Inevitably this leads to pinnacle echo chamber
behaviour: no one outside the bubble can be
[105:25] trusted, anyone talking about Apes is engaging
in psychological warfare to wear Apes down,
[105:32] because why else would you care about Apes
or find this interesting or newsworthy?
[105:39] The inevitable synthesis of this thinking
is a warped worldview where companies no longer
[105:43] go out of business for any reason other than
targeted destruction.
[105:48] Sears, Blockbuster, Toys R Us, hell, Enron,
get retroactively cast as the victims of short
[105:56] sellers.
[105:57] This is a lens on the world necessary to recast
Ape behaviour, their quest for infinite wealth,
[106:02] not as self-serving greed, but altruism.
[106:07] Virtue has been a part of the rhetoric since
the GameStop squeeze itself.
[106:11] Investors were engaged to buy and hold to
‘get revenge for 2008’ and ‘finally
[106:17] let the little guy have his fair share.’
[106:19] We won’t say that people didn’t genuinely
believe that - but you can imagine how useful
[106:23] that narrative would be to convince Apes to
hold while you personally divest your entire
[106:28] stake at $400 a share.
[106:31] The continuing escalation of the antagonism
of Wall Street has fed the Ape’s sense of
[106:36] morality.
[106:37] They are very much the good guys who are saving
the world by holding shares in GameStop.
[106:43] But at the same time, they have, you know,
ulterior motives - they want destructive amounts
[106:49] of money.
[106:50] They do that vile thing where ‘every share
is a tribute’ to certain deceased individuals.
[106:56] You know, a tribute that involves doing the
thing that they already wanted to do: hold
[107:01] GameStop shares.
[107:02] This sandwich?
[107:04] This is a tribute to my grandpa.
[107:06] Rest in peace, Jack.
[107:10] This creates fascinating and harrowing conflicts
in the Ape mindset.
[107:14] Some Apes are here just for the money, and
find the activism or philanthropic elements
[107:19] to be cringeworthy.
[107:21] But in the fiction, they are literally involved
in an invisible war against the most powerful
[107:26] entities on the planet - and are in order
to free us from our oppression.
[107:31] When they take the reins of the economy - they
are going to ‘do it right’, and be just
[107:37] sovereigns.
[107:38] It’s a full blown saviour complex.
[107:40] “We will make the world better, whether
it be locally, state-wide, nationally, or
[107:45] globally.
[107:47] We are here to fix the world that Wall Street
and the (bad) Boomers broke.
[107:52] We will use our tendies for good.
[107:54] And, perhaps, get a Lambo in the process (or,
in my case, a mother fucking Cybertruck).”
[108:02] But at the same time, they see the immense
payout of MOASS as the reward for the tribulations
[108:07] they have endured, billions of dollars in
remuneration for the disappointed side eyes
[108:11] they catch at family gatherings.
[108:13] They resent the fact that no one takes them
seriously, and their philanthropy exists in
[108:18] tension with a very intense urge to rub all
our noses in it when they’re eventually
[108:22] proven right.
[108:24] Because we all had our chance.
[108:26] “Beyond the toys you are going to buy, who
are you going to help?
[108:29] That’s what matters.
[108:30] Because there are plenty of people to help.
[108:32] Now you can’t help everybody, you can’t
save everybody from working a nine-to-five,
[108:36] they had their chance, okay?
[108:37] They coulda got in, they could have done their
DD, they could have done their research - we
[108:40] tried to tell them over dinner we tried to
tell them, they didn’t listen - WHATEVER.
[108:45] They had their chance.
[108:46] (laugh)”
[108:47] Because Apes are so disconnected from actual
fact, reality has been happy to deliver them
[108:50] an endless supply of Great Disappointments,
week after week after week of failed catalysts,
[108:56] missed hype dates, deconstructed gamma ramps,
and falling stock price as the stock price
[109:01] of these unprofitable companies continues
to decline from their short-squeeze peaks.
[109:05] It’s just, it’s kinda really, really funny
to watch this mass of people so deeply convinced
[109:12] that a drop in the value of GameStop is a
direct attack on them when GameStop is currently
[109:18] valued well above even their most profitable
years ever.
[109:23] As with any other apocalyptic belief placed
under cognitive strain, this leads to aggressive
[109:29] fragmentation.
[109:30] One group says that DRS is the way, but Apes
just haven’t been doing it properly, and
[109:36] an argument breaks out about Plan accounts
vs Book accounts.
[109:40] Another group says that Plan vs Book doesn’t
matter, all that matters is Apes need to DRS
[109:46] harder.
[109:47] Both groups accuse the other of being paid
shills employed to distract, fragment, and
[109:52] mislead the community.
[109:53] A late game DD theory is the belief in a turnaround
play, that MOASS won’t happen, per se, but
[109:59] Bed, Bath, and Beyond or GameStop or, hilariously,
some speculative merger of the two will achieve
[110:05] MOASS-like valuations based entirely off strong
fundamentals.
[110:10] “And the MOASS is irrelevant because what
GameStop is building is a great company”
[110:15] GME purists hold to a pure form of MOASS that’s
firmly rooted in spiritual loyalty to GameStop.
[110:22] Which rapidly turned into a spiritual loyalty
to Ryan Cohen.
[110:26] “Yeah, I didn’t, I didn’t actually buy
until March but, you know, I was reading the
[110:31] DD, then Ryan Cohen, he makes this play into
Bed Bath & Beyond and everybody on the boards
[110:38] just gets super hype about it.
[110:41] And yeah anything the man touches is gold.
[110:44] Like, he’s, he’s a kingmaker.
[110:46] He’s the book king.
[110:47] So, who is Ryan Cohen?
[110:50] Ryan Cohen is a bored billionaire who fancies
himself an activist investor, and a fixer
[110:55] of failing companies.
[110:56] He made his money selling the online pet food
store Chewy dot com to PetsMart which he founded
[111:01] with a combination of venture capital and
daddy’s money.
[111:04] The official story of Chewy admits that they
didn’t get outside investment until 2013,
[111:09] but they hired a bunch of executives from
Amazon and PetsMart right out the gate, and
[111:13] those suckers aren’t cheap, so logical deduction
is that, you know, there was already some
[111:18] money there.
[111:19] Next slide please.
[111:20] Ryan Cohen ran Chewy as a tech company, burning
venture capital and running at a loss until
[111:24] they were bought out for $3.35 billion in
2017.
[111:29] When the company went public in 2019 the company
disclosed a $268 million dollar loss for fiscal
[111:34] year 2018, Cohen’s final year as CEO.
[111:37] Next slide.
[111:38] In September 2020 as the meme stock wave was
gaining steam he disclosed that he held a
[111:43] 10% stake in GameStop, believing that the
company could be turned around.
[111:47] Cohen wrote an open letter to the GameStop
board in November, proclaiming his immense
[111:51] faith in GameStop’s potential if they would
only take his advice.
[111:56] On Thursday December 17th, 2020 he increased
his stake to 12.9%.
[112:01] All three of these events were catalysts for
GME.
[112:04] In August, GameStop was trading below $5,
by the end of the year, it would be around
[112:08] $19.
[112:10] Next slide please.
[112:11] An activist investor is an investor who buys
stock off the open market and then throws
[112:15] their weight around and tries to take an active
role in the running of the company, despite
[112:19] the fact that they didn’t actually give
any money to the company.
[112:22] Next slide.
[112:23] On January 11th, 2021 it was announced that
Cohen would join GameStop’s board of directors,
[112:28] and then in April Cohen was made the chairman.
[112:31] Cohen made bold promises of a transformation
into “the Amazon of gaming.”
[112:36] Next slide, please.
[112:38] Objectively Ryan Cohen isn’t good at actually
running companies or generating shareholder
[112:42] value.
[112:43] GameStop’s “turnaround” has resulted
in a large amount of capital wasted on fulfilment
[112:46] centres that were closed shortly thereafter,
a further retraction of the company from their
[112:50] global operations, and the launch of an NFT
marketplace that the company describes in
[112:54] its 10-K annual report as “not material
to the consolidated financial statements for
[113:00] fiscal 2022.”
[113:02] Next slide.
[113:03] Ryan Cohen’s one material impact on any
business he is involved in as an activist
[113:06] investor is that he is followed by Apes who,
based on his limited role in the January 2021
[113:11] run, have elevated him to a messianic role,
believing that he is working “behind the
[113:16] scenes” to engineer MOASS, and thus follow
his investments.
[113:20] Next slide.
[113:21] This irrationally passionate fanbase has succeeded
in keeping GameStop hovering at an absurd
[113:26] valuation well above the company’s actual
financial performance, but they’re also
[113:30] highly annoying, a burden for management to
deal with, and a possible threat to employees.
[113:34] “So what I’m going to do right now is
I’m going to go to this store here and ask
[113:40] if they are hiring.
[113:42] “That’s Ryan Cohen Strategy.”
[113:45] “Yeah, I like the guy.
[113:47] I Don't know if you like him, but I like him
so much.
[113:52] You know who I'm talking to.
[113:54] You know who I'm talking about right?
[113:56] No, you never heard about Ryan Cohen.
[114:01] If you're working in GameStop that name should
ring every bell.
[114:07] So right now what I notice is a lot of layoffs
in Bed Bath and Beyond and a lot of recruiting
[114:16] aggressively recruiting people in GameStop
Yeah, most likely there will be a merger between
[114:23] GameStop and Bed Bath and Beyond”
[114:25] “Wow.
[114:26] I, I don't even know how that works because
GameStop sells games
[114:30] and Bed, Bath & Beyond...”
[114:31] “The whole the whole thing is gonna change”
[114:34] All right, so That's the plan.
[114:38] So GameStop is merging with Bed Bath and Beyond(...)
and Ryan Cohen, he's not joking.
[114:46] He's not sitting as a chairman in This company
GameStop playing with his balls.
[114:53] No, he's not he's hiring, aggressively hiring
retail people and the merger is coming when
[115:02] the only one who knows this answer is Ryan
Cohen”
[115:07] Apes have taken to decoding any and all communication
from Cohen for any “Cohencidences” that
[115:12] they can point to as indications that he is
doing what they claim he is, because it would
[115:16] be very bad news for Apes if he were, in fact,
just some rich loser who enjoys the attention.
[115:23] Next slide please.
[115:25] No one wants to work with him.
[115:26] Given the poor material performance of GameStop
relative to its inflated share value, retailers
[115:31] Bed Bath and Beyond and Nordstrom both told
him to go take a hike after he attempted to
[115:35] buy his way into power.
[115:37] “You know, really, at the end of the day
hedge funds, they should have seen this coming.
[115:41] Like, they targeted gamers.
[115:42] We, we know what it means to just grind a
boss fight and grind reputation in a video
[115:56] game.
[115:57] So, like, locking the float.
[116:01] We can grind that out.
[116:02] We know what that takes.
[116:03] DRSing everything?
[116:05] You know, all of it?
[116:08] We can do that.”
[116:10] Compared to GameStop and AMC, companies with
products for kids and teens that at least
[116:14] have some connection to the nostalgia of youth,
Bed Bath and Beyond seems like a curveball,
[116:19] until you realise that the Apes just followed
GameStop’s “saviour” to his next project.
[116:25] When Cohen first disclosed his stake in Bed
Bath, the resulting Ape frenzy triggered Bed
[116:29] Bath’s largest intraday percentage price
increase since its initial public offering.
[116:35] Some investors bought in due to uncritical
zealotry towards Cohen, or belief that the
[116:39] Bed Bath play was a MOASS master stroke.
[116:43] Others believed he would genuinely rescue
the company, while others just wanted to get
[116:46] in early on the next pump and dump.
[116:49] Whatever the specific reason, we’re only
talking about Bed Bath and Beyond because
[116:53] of Cohen.
[116:54] Cohen bought into Bed Bath, because it was
a dying company he thought he could save - it’s
[116:58] cut and dry.
[116:59] Likewise, there is no nuance to Bed Bath’s
troubles.
[117:02] It’s a brick and mortar retailer that was
struggling for all the obvious reasons.
[117:07] Already declining sales, a failed pivot to
private label goods, the pandemic and subsequent
[117:11] supply chain disruptions, poor relations with
their vendors, and a disastrous stock-buyback
[117:16] program loading the company with debt created
a negative feedback loop where the company
[117:20] couldn’t stock its shelves.
[117:22] The company reached the point of allegedly
turning off the air conditioning to save money.
[117:28] Why Ryan Cohen thought he could right this
ship is anyone’s guess.
[117:32] But it’s fair to say that he didn’t have
much tangible impact one way or the other.
[117:37] Presumably he intended to rapidly work his
way up the chain as he did with GameStop.
[117:42] Instead, the board resisted Cohen’s influence
and within weeks Cohen and the company had
[117:47] settled on an agreement to prevent a hostile
takeover attempt.
[117:51] Cohen was fixated mainly on Bed Bath’s baby
supplies subsidiary buybuyBABY - insisting
[117:56] that “under the right circumstances, BABY
could be valued on a revenue multiple, like
[118:01] other ecommerce-focused retailers, and justify
a valuation of several billion dollars.”
[118:07] The claim, already loaded with caveats, was
based on a years old internal evaluation by
[118:12] Bed Bath, and we know now that it was hogwash,
Baby was incapable of standing on its own
[118:18] without the subsidisation of Bed Bath’s
supply chain, but this number is still cited
[118:23] by Apes over a year later.
[118:25] So, in August he decided to divest his interest
in Bed Bath - but did so in a way that the
[118:29] kids might call…
[118:31] Sus.
[118:33] Cohen initially bought a 9.8% stake in the
company - which needs to be disclosed via
[118:38] the filing of a Schedule 13D.
[118:40] But in the time following Cohen’s purchase,
Bed Bath was in the process of carrying out
[118:45] a share buyback, which reduced the number
of outstanding shares and increased Cohen’s
[118:49] ownership to 11.8% without him personally
trading.
[118:54] As a seemingly irrelevant preamble, on the
12th Cohen tweeted “at least her cart is
[119:00] full moon emoji” in reply to a scathing
CNBC article about Bed Bath.
[119:05] He was required to update all the paperwork
on his ownership by the end of April 2022,
[119:10] but didn’t file the necessary Form 3 indicating
a 10% or greater ownership until after the
[119:16] close of trading on August 15.
[119:19] By now it should be clear that Apes… aren’t
very good at all this.
[119:22] So when they saw this, they either thought
Cohen bought more shares, or that, in concert
[119:27] with the tweet, he was signalling to them
to buy more, to fill up their carts, moon
[119:33] emoji.
[119:34] On the following morning, before trading opens,
Cohen then updates his Schedule 13D to reflect
[119:39] the new number.
[119:40] Apes again, see this as bullish AF, and go
crazy - driving up Bed Bath’s share price
[119:46] by 70% over the course of August 16.
[119:49] Cohen then submits a Form 144 to the SEC,
stating that he hadn’t bought or sold any
[119:55] Bed Bath shares in the last 3 months but was
maybe intending to.
[119:59] After this submission, Cohen then divests
himself of all of his Bed Bath shares, reportedly
[120:05] pocketing $68 million in profit on his initial
investment.
[120:09] The Form 144, stating Cohen’s intention
to sell, goes public the following day on
[120:14] the 17th.
[120:15] This spreads mass Ape confusion.
[120:17] Finally on the 18th, Cohen amends the Schedule
13D and Form 4 to reflect his sale of Bed
[120:23] Bath two days earlier.
[120:25] And that ends Cohen’s “long-term” involvement
with Bed Bath after about 9 months.
[120:31] Now, whether this constituted misconduct from
Ryan Cohen is not a question we can answer,
[120:36] but it is a question worth asking.
[120:39] Unfortunately we may never get an answer,
because while a lawsuit against Ryan Cohen
[120:43] on this matter is ongoing, it’s a mess.
[120:46] A self-represented Ape raced to the courts
in less than a week, to file a class action
[120:51] lawsuit that put forth an unhinged account
of this situation.
[120:56] According to the Complaint, Ryan Cohen had
been planning this from the beginning as part
[121:00] of a conspiracy with Bed Bath’s CFO, who
the complaint misnames repeatedly, and also
[121:05] JP Morgan was in on it for some reason.
[121:08] It’s bad.
[121:09] The Complaint is littered with factual errors,
applies the wrong laws and is just a trainwreck
[121:14] from end to end.
[121:16] The case was wrestled off the Ape and an “amendment”
was submitted that looks like this - but there’s
[121:22] only so much the new team can do to alter
the original complaint.
[121:27] So it’s unlikely that anything meaningful
will come of it.
[121:30] If a jury were to find that Cohen’s behaviour
was a deliberate effort to inject misinformation
[121:35] into the market, it would be a textbook example
of actual market manipulation.
[121:40] It would be a situation in which retail investors
would be compensated for damages caused by
[121:45] said manipulation.
[121:47] Yet remarkably, despite this being a lawsuit
focusing on giving the Apes money - the loyalty
[121:53] of many Apes remains with Cohen, so they cheer
against the success of the class action.
[121:59] This is the end of Ryan Cohen’s involvement
with Bed Bath and Beyond.
[122:03] We aren’t aware of him so much as mentioning
it in the time since a one off interview in
[122:08] November of 22
[122:10] “My views changed, of the business, and
ultimately I sold.”
[122:16] And yet, rather than Apes accepting what’s
just happened to them, that their supposed
[122:20] genius activist investor who would make them
all rich lured them into buying shares in
[122:25] a dying retailer, Ape’s started to bake.
[122:29] The decoding goes up a whole new level.
[122:31] At this point there is absolutely no communication
from Cohen regarding Bed Bath and Beyond,
[122:37] so they need to both uncover the secret messages
and then decode them.
[122:42] Cohen said he was in Bed Bath for the long-term,
and then bailed inside 9 months.
[122:46] Did he lie?
[122:47] Did he rapidly pivot when things didn’t
go his way? or was that initial statement
[122:53] always intended to reassure Apes that he was
in on the play, regardless of how it appeared?
[122:59] The myth quickly became that Cohen didn’t
abandon the Apes or give up on Bed Bath.
[123:03] Instead, Cohen had to work from the shadows,
to outmanoeuvre both the Bed Bath board themselves,
[123:09] who didn’t want anything to do with him,
and the short sellers.
[123:13] This is when we get that Carl Icahn tweet.
[123:16] Apes took this to be definitive evidence of
a partnership between Cohen and Icahn - whose
[123:21] endgame was to merge GameStop and Bed Bath
into a competitor to Amazon.
[123:26] “Deal’s already done.
[123:28] We still don't know where Icahn's son is at.
[123:31] RC's yet to reveal himself, Icahn has to be
involved himself
[123:35] Oh yeah, look at IEP falling, man, the timing
of everything man
[123:39] come on, they, like These people who don't
believe in this shit, they wanna try to psych
[123:43] you out and gaslight you into shit, but honestly
man, the timeline matches up, so honestly
[123:47] man I'm
taking the gamble, personally, so there it
[123:50] is
[123:51] And then… and then in November of ‘22
Cohen publishes a series of children’s books
[123:56] called Teddy.
[123:57] These are mediocre pro-capitalist pablum,
basically exactly what you’d expect from
[124:02] a billionaire libertarian who is bored out
of his mind and desperate for the approval
[124:06] of others.
[124:07] Apes, of course, fired up the industrial ovens
and got ready to bake like they’d never
[124:14] baked before.
[124:15] “Ryan's Children's books are actually hidden
messages for us!
[124:20] Just look at those titles!
[124:22] China?
[124:23] Money?
[124:24] Running the world?
[124:25] Words can't hurt you(FUD)????
[124:26] It's the only way he can legally communicate
with us…”
[124:30] “My daily tin foil...
[124:31] What up with the pattern on Teddy's signature
shirt?”
[124:34] "I know people think these easter eggs are
wrong, but I believe the deal was closed on
[124:39] the 10th (Teddy Day) and the 13th (Teddys
Belt Buckle) is when the filing will drop.
[124:45] Also Merger Monday.”
[124:46] China is an anagram of Icahn, Teddy goes to
China?
[124:50] That means Ryan has approached Icahn about
a lucrative partnership!
[124:54] The books teach literal children to not put
all their eggs in one basket, which of course
[124:59] means that GME holders should also buy Bed
Bath and Beyond.
[125:03] When it’s 1:50 the clock hands point to
10 and 2, which means that any alignment of
[125:08] 10, 2, 12, 1, and 50 become valid readings
of the hidden code.
[125:13] If you save your money you can buy ice cream,
which clearly means if you HOLD then you get
[125:18] your TREATS, which is another way of signalling
TENDIES.
[125:22] “I want to be the book king” - clearly
he wants us booking our shares!
[125:27] General TSO’s chicken!?
[125:28] Tokenized Security Offerings!
[125:31] It was rumoured that Cohen was going to be
buying a stake in Alibaba, the Amazon of China.
[125:36] But then also Cohen tweeted about James Cameron’s
Titanic, one of the most popular and successful
[125:41] films in the history of human existence, and
Apes took this as an obscure reference to
[125:45] a potential announcement, and wouldn’t you
know it, February (2) tenth (10) 2023 is both
[125:53] National TEDDY bear day, and the re-release
of Titanic, there are too many Cohencidences!
[126:01] This is it!
[126:02] This is Teddy day!
[126:03] Ryan Cohen is going to be announcing an acquisition
of Bed Bath and Beyond with his good friend
[126:08] China, read Icahn, where he’s going to spin
off BuyBuyBaby and merge with GameStop to
[126:13] form GMErica.
[126:14] “Exactly.
[126:15] And the shills call it all crazy conspiracy
theories.
[126:19] Fucking r—-s.
[126:20] RC can’t just come out and say oh hey guys
I’m working on a M&A deal with buy buy baby
[126:24] - get ready to be rich on a specifically called
out date.”
[126:27] He said all he could say through the books.
[126:29] if you are really patient, one day you will
have money to eat all the ice cream you want
[126:35] while taking care of your family and friends.”
[126:38] “As I see it guys, these guys are expanding
their catalogue, but without throwing up the
[126:45] flare - ‘hey, we’re getting
bigger’.
[126:48] So now what can happen for GameStop, GameStop
can absorb Teddy at any time and in verse
[126:55] they have it all set out the map is there.
[126:58] He’s been building it in secret behind everything
else.
[127:02] And now you have a partnership.”
[127:04] Let’s take a moment and just marinate on
this, on just how far all of this has come.
[127:11] We’ve gone from vaguely-legitimate if poorly
understood and ill-defined theories on market
[127:17] mechanics to staring at illustrations of an
old man fumbling a turkey in order to extract
[127:23] coded financial advice from the patterns on
his shirt.
[127:28] There’s really only one way this can go.
[127:30] “It is a reality that business often make
poor decisions, misdirecting company resources
[127:36] to wasteful pet projects or failing to adapt
to changes in taste, technology, and society.”
[127:43] So we’ve reached a point where Apes are
convinced that Ryan Cohen is going to swoop
[127:47] in and buy out Bed Bath and Beyond.
[127:49] Their evidence for this is overwhelmingly
based on secret messages delivered to them
[127:53] via literal children’s books.
[127:55] Their grasp on reality has totally frayed
at this point.
[127:59] Every Bed Bath statement was a coded message,
all bad news was just to throw off the short
[128:05] sellers.
[128:06] This meant that as Bed Bath continued to decline,
the Apes looked at it with distrust and confusion.
[128:11] In January, 2023 Bed Bath and Beyond defaulted
on a loan payment, and on February 1st they
[128:17] missed an interest payment on three tranches
of bonds.
[128:20] This is bad, this is “we are completely
out of money” levels of bad.
[128:25] In response to this they were approached by
a firm, Hudson Bay Capital Management, who
[128:29] presented them with a deal that was completely
insane.
[128:33] The deal is commonly referred to as “death
spiral financing” - and if Lucifer appeared
[128:38] alongside Hudson Bay at that moment and offered
Bed Bath an alternative deal, it’d be the
[128:43] same.
[128:44] These deals are the last resort, where the
investor will offer a shockingly small amount
[128:49] of capital up front, and in exchange they
get to decimate the stock price to whatever
[128:54] extent is necessary for them to earn their
return.
[128:58] A company signing a deal like this is the
unambiguous signal that they’ve exhausted
[129:03] every alternative.
[129:05] The basic arrangement of the deal is that
Hudson gets preferred convertible shares from
[129:09] Bed Bath for a lump sum of money, then these
preferred shares can be converted into common
[129:14] shares that Hudson can immediately sell on
the open market, with the number of shares
[129:18] generated based on the lump sum divided by
the recent average value of a share with a
[129:23] sweet discount just to make sure that Hudson
always has a profit margin.
[129:28] These are called “death spiral financing”
because they’re a recipe for massive share
[129:32] dilution.
[129:33] The financer buys preferred shares for a fixed
sum, converts those into a variable number
[129:37] of shares, and then dumps those shares on
to market, almost certainly lowering the share
[129:42] price via dilution alone if not compounding
negative sentiment and massacred investor
[129:47] confidence.
[129:48] The share price going down means that the
next preferred share they convert will convert
[129:53] into even more common shares, which will further
lower the price, which will convert the next
[129:58] block into even more shares, and over and
over.
[130:02] In a mere six and a half weeks Hudson more
than quadrupled the number of Bed Bath and
[130:07] Beyond shares in existence.
[130:09] Apes’ diamond-handed buy-at-any-cost irrationality,
their stubbornness, the very thing that Apes
[130:15] tout as their secret weapon against the hedgies,
is the exact thing Hudson was counting on
[130:21] to turn their profit.
[130:23] The grim irony that Apes are so predictably
irrational in their made up war against hedge
[130:29] funds and short sellers that it leaves them
open to all manner of unique and awful exploitation
[130:36] at the hands of hedge funds and short sellers,
the irony is so deep you could drown in it.
[130:42] The capital Hudson Bay offered was used to
pay down debt, there was nothing left to fix
[130:46] any of the structural problems with the business,
so the only thing the deal bought them was
[130:50] time.
[130:51] The Hudson Bay deal was terminated after less
than two months, as Bed Bath’s stock price
[130:56] fell under a dollar and showed no signs of
recovery.
[130:59] And through this, the whole time, Apes denied
that dilution was happening, denied that it
[131:04] was the cause of the decline in the share
price, denied that Hudson Bay Capital was
[131:08] the buyer, mocked the Wall Street Journal’s
use of inside sources “familiar with the
[131:13] matter”, and denied that Bed Bath and Beyond
was even in the precarious position that Bed
[131:17] Bath was actively warning them of.
[131:20] “We need the proceeds from the Transactions
to pay our outstanding obligations under our
[131:25] Credit Facilities and Senior Notes and to
operate our business, and we expect that we
[131:30] will likely file for bankruptcy protection
if the Transactions are not consummated.
[131:34] The issuance of the securities in this offering
will significantly dilute the ownership interest
[131:40] of the existing holders of our common stock
[131:43] Trading in our securities is highly speculative
and poses substantial risks to investors.”
[131:48] This is the context in which Heat Lamp is
produced.
[131:51] A conspiracy whose every element is reverse-engineered
to offer a semblance of hope.
[131:56] Critically in-curious, Heat Lamp is baseless
speculation that squares the circle and explains
[132:01] away the continued failure to Apes to crash
the global economy after two full years.
[132:06] Okay, so, so get this.
[132:09] What if.
[132:10] What if we assume ComputerShare has an algorithm
that manages their operational efficiency,
[132:17] and this algorithm works like a heat lamp
in a diner?
[132:22] The algorithm moves shares into the DTCC in
anticipation of imminent transactions.
[132:27] So, what Wall Street is doing is rolling up
a bus full of people into the parking lot.
[132:31] The staff start making hamburgers and putting
them under the heat lamp.
[132:35] But wouldn’t you know, the customers are
all vegetarians, and I guess aren’t hungry.
[132:40] So now the DTCC can borrow the hamburgers
and use them to create synthetic hamburgers
[132:46] which can be used to cover Citadel’s illegal
hamburger sales and then return the counterfeit
[132:51] hamburgers to the diner as if they were the
originals.
[132:55] The perfect crime.
[132:57] But this wasn’t the part of Heat Lamp that
made it stick.
[133:00] That hamburger metaphor was buried inside
a 5,000 word rant so incoherent that we can’t
[133:07] even pull any usable soundbites, it’s just
walls of nonsense.
[133:11] The author’s prior attempts at sharing this
“thesis” had been met with criticism and
[133:17] mockery, resulting in mods putting the threads
in the trash.
[133:19] So the core of Heat Lamp is this beautiful
story of self-actualisation, as the Ape learned
[133:25] that his ideas are important and deserve to
be read - no matter what anyone tells him.
[133:31] The bulk of Heat Lamp is scathing accusations
of “censorship through intimidation” by
[133:36] the mods - claiming that this banger of a
DD is being suppressed by the mods to protect
[133:42] the interests of ComputerShare, and therefore
the interests of the enemy.
[133:46] It’s full blown McCarthyism.
[133:48] And that rhetoric is what the Apes took from
Heat Lamp.
[133:52] The Ape influencers find themselves more and
more in the same dilemma as conservative YouTubers
[133:57] who nurtured fascist audiences.
[133:59] They need to play to the crowd or risk being
turned on.
[134:03] During the scripting of this video, Atobitt,
one of the key figures in the Ape community
[134:08] who you’ve been seeing constantly, deleted
his account in response to harassment brought
[134:14] on by expressing waiving faith in the ability
of Apes to defeat Ken Griffin.
[134:19] Atobitt, like so many other DD authors before
him, evolved into his final form.
[134:25] u/[deleted].
[134:27] The soap opera conspiracy twists and turns,
that’s the fun stuff.
[134:31] The really sinister element of all this is
that it’s not just socially engaging, it’s
[134:37] addictive.
[134:38] Ape forums are littered with statements and
sentiments that are stereotypical of gambling
[134:43] addicts.
[134:45] Apes are constantly talking about their plans
to buy more, how they wish they could afford
[134:49] more, how they can’t wait for their paycheque
so they can get more shares of Bed, Bath,
[134:54] and Beyond.
[134:55] They use contrarian sentiment to justify their
habit.
[134:58] The price goes down?
[135:00] Buy more.
[135:01] The price goes up?
[135:02] Buy more.
[135:03] Bad news?
[135:04] Buy more.
[135:05] Good news?
[135:06] Buy more.
[135:07] Thanks for the tasty dip.
[135:08] They suppress the price, I buy more out of
spite.
[135:10] They hide their habit from friends and family,
complain that partners try to limit how much
[135:14] GameStop they buy, and brag about going behind
their partners’ backs.
[135:18] They take money from friends and family while
talking up the “college degree worth of
[135:23] DD” they found on Reddit and pour it all
into this slate of poorly run companies that
[135:29] they believe have been elected as the candidates
for a mythological short squeeze.
[135:35] The entire idea of dollar-cost-averaging,
an actual investment strategy, has been warped
[135:40] into pure delusional cope of “averaging
down” as the stock price keeps plummeting.
[135:46] In their minds it’s a sure play, so of course
it makes sense to lower your cost basis and
[135:50] thus improve your return, but even then, within
the whole mythology of MOASS, if the stock
[135:55] is supposed to go to phone book numbers, then
it really doesn’t matter what your average
[136:00] was.
[136:01] It’s just an exercise in sunk costs, catching
a falling knife.
[136:05] “As for me, after holding from $350 to $40,
price drops only get me more excited.
[136:12] Every price drop is a discount and another
opportunity to buy.”
[136:16] The performative aspects are irony-poisoned
and insincere in a genuinely sickening way.
[136:21] A lot of the Ape lore is easily discarded
by their podcasters and DD authors because
[136:26] they ultimately know it’s not true.
[136:29] The hype, the tinfoil, the Cohencidences,
the wife-changing money, the lambos, these
[136:35] are the social performances needed to maintain
the veneer wrapped around the pathetic core
[136:40] of a gambling addiction whose only hope for
recovery is recruitment.
[136:44] It’s the justification and distancing, the
things that need to be true in order for the
[136:49] vast amounts of time, energy, and money dumped
into these shares to not be a waste, but Apes
[136:55] will still always keep one foot grounded where
they can say “oh, of course Teddy Day wasn’t
[137:02] going to happen!
[137:03] That was just hype!
[137:04] For fun!”
[137:06] The thing that January 2021 demonstrated was
that the price can go to the moon for no coherent,
[137:13] sensible, sane reason beyond a bunch of people
on a forum willing it into existence by convincing
[137:19] enough other people to believe, and if it
happened once then maybe it can happen again.
[137:26] But that constant double-think, the constant
cognitive dissonance of hyping up knowingly
[137:31] fake ideas purely to maintain energy in a
failing stock play to put on an outward facing
[137:37] performance to lure in new participants because
if you don’t, if you flinch, if the irony
[137:43] armour cracks and you admit out loud that
you don’t actually believe, then it all
[137:48] falls apart, reality becomes true, and then
it definitely won’t happen again, that takes
[137:55] a toll.
[137:56] The illusion must be defended at all costs,
because the illusion is all that there is.
[138:12] [Sentimental music]
[138:20] On April 23, 2023, Bed, Bath, and Beyond filed
for chapter 11 bankruptcy.
[138:45] Despite the staggering dilution deal, the
company simply couldn’t raise enough capital
[138:49] to get ahead of its debts, most of which were
incurred in a stock buy-back program that
[138:53] only ended in late 2022, long after the start
of the company’s decline.
[138:58] Over the course of May and June they sold
off the company piecemeal, favourable lease
[139:02] obligations here, a building there, inventory,
shelves, desk chairs, computers, basically
[139:08] anything a price could be attached to was
sold off and the proceeds sent directly to
[139:12] their creditors.
[139:13] Apes, of course, willfully immune to reality
at this point, considered all of this to be
[139:18] bullish.
[139:19] This would be painful but necessary, but when
all was said and done even if MOASS never
[139:24] happened, Bed Bath would still pay off handsomely.
[139:28] This was founded on absolutely nothing, rooted
entirely in word games based on theories that
[139:33] the company failed to directly deny.
[139:36] The company itself had been warning them since
January that in the event of bankruptcy holders
[139:41] of the common shares would receive nothing.
[139:43] Even in Bed Bath’s initial bankruptcy petition
any sort of restructuring that would salvage
[139:45] current equity was simply off the table.
[139:46] Critics who predicted that the Hudson deal
would merely upgrade the company’s forced
[139:49] liquidation in chapter 7 up to a managed liquidation
in chapter 11 were right, and Apes were wrong.
[139:56] Literally nothing that Apes predicted came
true, because they aligned themselves into
[140:01] a movement that refused, categorically, to
accept reality as it exists.
[140:06] “Trading prices for our securities may bear
little or no relationship to the actual recovery,
[140:12] if any, by holders of our securities”
[140:15] Bankruptcy proceedings plodded along and the
mythological Ryan Cohen reverse-triangle-merger
[140:20] Teddy Icahn partnership NFT dividend reward
for loyal shareholders never emerged.
[140:25] In early June the deadline for the stalking
horse bid kept getting kicked back a few days
[140:30] at a time, from the 1st to the 8th to the
11th to the 13th.
[140:34] Since the stalking horse bid sets the tempo
for further liquidations, rumours in reality
[140:39] were that the bids submitted were all relatively
small grabs at specific assets rather than
[140:44] any move for the company itself and the company
wanted more time behind the scenes to try
[140:49] and rustle up a better offer.
[140:52] Rumours in the Ape universe were that the
offers were in fact so good that Bed Bath
[140:57] needed more time to properly evaluate the
true value of complicated share-for-share
[141:02] offerings of GameStop and Icahn Enterprises
L.P. for BBBY.
[141:07] Again, Icahn’s sole actual involvement in
all of this is that he let Ryan Cohen take
[141:14] a photo with him.
[141:16] The actual stalking horse bid, selected on
June 13th, was Overstock, a $900m company,
[141:22] offering $21.5 million for the company’s
name, logo, website, mobile app, and relevant
[141:28] databases.
[141:29] Chalk another W for the Wall Street Journal
and their sources familiar with the matter.
[141:34] Finally, September 29th, 2023, the company
formerly known as Bed Bath and Beyond “cancelled,
[141:39] released, and extinguished” all shares in
the company.
[141:42] Those intangible legal rights, the actual
thing shares represent, ceased to exist.
[141:48] And you might hope that that would be the
end of all of this, but, well, you know it
[141:54] isn’t.
[141:55] See, there’s always something to grasp on
to.
[141:58] The shares may be legally void, but it’ll
take years for every last broker on Earth
[142:03] to remove the worthless husks from Apes’
accounts because of boring reasons like record
[142:08] keeping laws and just low priority.
[142:12] So that’s years and years where an ever-dwindling
core of increasingly entrenched Bed Bath Apes
[142:17] can hold out hope that Ryan Cohen will swoop
in and give them absurdly valuable shares
[142:23] in a company that doesn’t even exist.
[142:25] The apocalypse is always just one more day
away.
[142:29] Apes are in a lot of ways the funhouse mirror
version of the stock market
[142:33] They’re not anti-Wall Street.
[142:35] They’re tsundere for Wall Street.
[142:36] They want to be scrappy, important, savvy
underdog traders who saw an opportunity and
[142:42] seized it.
[142:43] They quote The Wolf of Wall Street and The
Big Short because that’s who they see themselves
[142:47] as.
[142:48] Sure, they say they hate Wall Street, but
then they spend all their free time obsessing
[142:53] over funnelling more and more of their money
into the stock market.
[142:58] There’s a desire, an instinct, to try and
tease Apes apart from the rest of the stock
[143:03] market, to invalidate their approach as a
perversion of the market, if not something
[143:07] entirely separate.
[143:09] It can be said that the Apes aren’t engaging
with stocks as an intangible signifier of
[143:15] a claim to some percent of the company, but
as a wholly distinct thing, an entirely abstract
[143:21] vessel of value.
[143:24] Given the overlap between crypto apes and
memestock apes, whether it’s GameStop or
[143:28] DogeCoin, it’s really the same behaviour.
[143:31] An accurate criticism of the Ape system is
that this behaviour entirely decouples the
[143:35] price of the shares from the value of the
company, to the point that companies like
[143:39] Bed Bath & Beyond are saying as much in their
filings.
[143:43] The Ape counter-criticism is that this is
just how the stock market works, that they’re
[143:48] just doing what the big players do.
[143:50] And this is a compelling conflict of ideas,
because it’s wrong, but not entirely wrong.
[143:56] There is an argument to be made that in one
sense all stocks are meme stocks, that narrative
[144:02] and story are the driving forces of the stock
market, that talk of fundamentals is all lip
[144:09] service, that fundamentals only matter insofar
as they can be woven into the story.
[144:15] After all, the whole exercise is a game of
trying to predict the future, trying to price-in
[144:19] things that haven’t happened, but you believe
are going to, and that is, really, just complicated
[144:25] storytelling.
[144:26] Both groups are telling a story and just sort
of lightly gesturing at something external
[144:31] to the narrative that justifies its conclusions,
in that regard Apes are, in fact, a reflection
[144:37] of the system.
[144:38] Really the only major difference is that the
things they are gesturing towards are not
[144:41] merely wishful thinking based on suggestive
data, but entirely confabulated nonsense.
[144:48] Nothing in Ape psychology is new: addiction
to gambling, the pressure of social control,
[144:53] we are all vulnerable to these in some degree,
but when you get deep into these places it
[144:59] takes on whole new forms.
[145:01] Apes are, as a result of their conflict with
reality, particularly vulnerable to being
[145:05] further targeted by confidence men and other
grifters.
[145:09] Some of them grift the Apes for low-stakes
fame and prestige, some to wash their pet
[145:13] theories and gain support for their political
policies, and some for plain old hard cash.
[145:18] It can be difficult to have empathy for Apes
because, frankly, a lot of them suck.
[145:23] They are conspiratorially minded and, thus,
prone to all sorts of terrible beliefs, many
[145:28] of which dovetail into express antisemitism,
making them ripe for recruitment into even
[145:33] mere extreme ideologies.
[145:35] As addicts they regularly make terrible decisions
that hurt others.
[145:39] They talk often about stealing from their
spouses, or at least hiding their addictions
[145:43] as they spend all the money in the shared
account.
[145:45] Many are profoundly unhappy in their relationships,
joking through gritted teeth about "wife-changing"
[145:51] money and how much they resent their partners.
[145:54] Of course it's easy to see how that resentment
might form.
[145:58] They lie, they steal, they recruit relentlessly,
and they insist that others simply fail to
[146:02] recognize their brilliance.
[146:04] They stress every relationship they are involved
in and routinely hurt their families with
[146:09] their reckless gambling; it’s no mystery
why the wife isn’t too happy with them these
[146:15] days.
[146:16] These groups and movements appeal to entitled
personalities, and the entire structure of
[146:19] their psychology and socialization is addictive
and retentive.
[146:24] The narrative of participation flatters them,
it makes them savvy, important forward-thinking
[146:29] investors who are beating the system at its
own game.
[146:31] They cannot leave, quit, or even mentally
check out because then they’ll miss the
[146:36] window of the next big play.
[146:39] When the Due Diligence and Quantitative Theory
are made up out of mythological nothingness
[146:43] it’s easy, even logical, for the upsides
to be so overwhelmingly valuable that any
[146:50] behaviour, no matter how craven or irrational,
becomes permissible.
[146:54] It’s tempting to see apes in their full
performative hubris bragging about “buying
[147:00] the dip” and thanking Ken for “the discount”
and think
[147:03] “you know what, they brought this on themselves.”
[147:06] But no one deserves to be exploited like this.
[147:12] No one deserves to get shaken down by grifters
to the point that they have no other choice
[147:14] but to become grifters themselves and shake
down everyone else around them.
[147:18] No one deserves to have their ego and security
ground down to the point that there’s no
[147:23] escape, no reason to step back and admit defeat,
no reason to reflect.
[147:29] Ironically the biggest winners in all of this
have been hedge funds.
[147:33] Sure, Keith and a few others made bank off
the GameStop run, but half of them gambled
[147:38] their gains away.
[147:39] Hedge funds on the other hand have been able
to play against Apes and their predictable
[147:44] irrationality.
[147:45] Melvin ate dirt in '21 and closed up shop
in '22, but Citadel started using Wall Street
[147:51] Bets as a recruiting ground and Hudson Bay
made a tidy profit by assuming that Apes wouldn't
[147:56] just buy and hold through massive dilution
but would outright thank them for the tasty dip.
[148:03] It is, as a phenomenon, an incredibly fraught
subject for regulators because, just, how
[148:08] do you respond to this?
[148:10] Setting aside bigger, broader questions about
what markets even should be, how do you respond
[148:16] in the immediate term to a group of investors
with enough collective inertia to move prices
[148:23] but a fundamentally flawed understanding of
what they’re even doing?
[148:28] The grim irony of Ape culture is that it has
the operative mechanisms of a gambling addiction
[148:33] without actually gambling.
[148:35] See, if it were a gamble, if they were truly
betting on something, then there would be
[148:39] some actual odds of winning.
[148:42] Apes like to talk about “high risk and high
reward” as a coping mechanism as the mismanaged
[148:47] companies they’re betting on continue to
slide out of business, but all framing devices
[148:52] like that assume that the thing you’re betting
on can actually happen.
[148:57] The weakest team in the league can, theoretically,
pull out a dark horse run and take the cup.
[149:04] That’s a high risk, high reward bet.
[149:06] Apes, on the other hand, with their theories
of MOASS, with their Cohencidences and Icahn
[149:12] secret reverse triangle mergers, with their
fundamental misunderstanding of how a short
[149:17] sale even works, they’re sitting around
a blackjack table convincing each other that
[149:21] there’s a secret rule, that if you hit 31
then the dealer has to give you their entire
[149:26] tray.
[149:27] So hit me.
[149:31] Hit me.
[149:33] Hit me.
[149:35] Hit me.
[149:38] And a cold wind is blowin’ and the children
freeze and die all all right.
[150:08] For the record, I have read the entire United
States Bankruptcy Code, written by the 95th
[150:13] American Congress, November 6, 1978.
[150:16] It has given me an incredible understanding
on how to factually interpret information
[150:21] filed on Kroll, given understanding to previously-omitted
information that I disregarded in the past
[150:27] and I will be referencing United States Law
to factually prove that Ryan Cohen remains
[150:33] involved with this company.
[150:35] Plus we clearly have figured out the game
these people are playing and thave their balls
[150:40] in a vice.
[150:41] If it’s not this play we move to the next.
[150:44] The honey hole has been exposed.
[150:46] It feels like we’re driving backwards really
fast at a wall, and just before we hit it
[150:52] the secret level in Ready Player One is going
to open up and let us pass by the entire race
[150:57] and win.
[150:58] The fact that so many shills spend so much
of their time endlessly replying to us, yelling
[151:03] at us to explain what assets are left, how
we’re soon going to zero, I’ve never seen
[151:09] so many humans spend so much time on something
that doesn’t concern them, and it’s quite
[151:15] bullish.
[151:16] The short hedge funds biggest mistakes in
my opinion is they tried to burn this company
[151:20] to the ground which they succeeded but that’s
been a known move all along by an activist
[151:26] investor “know your enemy”, now they are
trapped in bankruptcy court.
[151:31] So now Apes can buy really low and the upside
is so high.
[151:36] If you like this prediction, I also have a
free NFT giveaway.