My first DD on GME! And yes of course I’ll add the obligatory “this is not investment advice but rather my own opinion based on publicly available information. Carefully consider your own investment objectives and risk factors before investing.”
TLDR: Nearly the entire float of available GME shares trades hands EVERY SINGLE TRADING DAY. Stocks with extremely high Turnover Ratio like this are subject to VOLATILE and sometimes VIOLENT changes in price, depending on which side of the demand/supply equation you’re on. With 2x-5x float likely in short and naked-short synthetic positions the MOASS is not a question of it, but when.
I don’t know about you folks, but I guess after a few down days and a $224/share avg I needed some additional reassurance that our GME will indeed take off one day. So, I dug deep into the memory banks and recalled one important supply-demand ratio from my investment finance classes, namely the Turnover Ratio (TRO).
Do you ever notice how some stocks seem to soar suddenly, often with little or no news? While other stocks can receive ongoing great news and hardly move higher at all? Well, my smooth brained apes…as you can imagine it’s all about supply and demand.
At the end of the day what makes a stock rise in value? If you answered “more buyers than sellers” than you win a banana! So how do we compare one stock to another and determine how changes in demand can affect the upward (or downward movement) of the price?
A quick definition check:
10-D AVG VOL (10-day average volume): Reflects more current trading activity, expressed as average daily volume over the last 10 trading days
FL (Float): We’re all well versed on this one, but just in case float is “the number of shares outstanding, or all the shares there are for that company, minus what is owned by insiders and what the company is holding back (treasury stock). In a nutshell, associate the float with the supply of shares available to be traded at any given time by the public.”
So with those definitions in mind, I decided to pull Yahoo Finance’s Top 25 most active stocks for today, March 16th and dive right in. Most active stocks are listed in order of today’s volume. I then added additional columns for, you guessed it, 10-D AVG VOL and FL.
This now sets us up for the simple TURNOVER RATIO (TRO) calculation, which is 10-D AVG VOL / FL.
If the float is very large relative to the average volume (lots of shares out there to be bought and sold in relationship to the average volume) we would see a low turnover rate and thus an onrush of buyers would not move the price much (think Ford stock)
However, if the float is low relative to the average volume (a lot of people wanting very few available shares,) a sudden rush of buyers could move the price of a stock dramatically (think Gamestop).
So how does our precious little GME rank. Have a look at the image above and see for yourself!
GME’s TRO is 93%. Ninety-Three Per Cent!!!
That’s 25% higher than the next highest security (Sundial), and a whopping 86% higher than the entire group average!
This essentially means 930 out of every 1,000 tradeable shares of GME have changed hands every single day over the last ten days.
This tells us GME is a VERY volatile a stock that will trade violently given an imbalance in supply or demand either to the up or downside.
So let me ask you this: Did you sell your stock recently? Did you? What about you? I sure as hell didn’t? So how the fuck is this possible? Easy. This is exactly what all the brilliant DD’s before me have already confirmed: There are synthetic GME shares out the whazooo being traded ALL DAY LONG. With short and naked-short interest estimated anywhere between 2-5x float we are about to witness a historic MOASS imbalance play out before us.
My fellow apes and ape-ettes, we are patiently waiting for liftoff on the “right” side of this very equation. All you have to do is HOLD and continue to keep this Turnover Ratio in our favor. The greedy idiots that decided to double and triple down on GME’s demise WILL be held accountable someday very soon.
And don’t forget to ensure your 5-pt harness is buckled up tight. When this thing takes off we’ll be pulling G-forces that’ll peel our eyelids back and leave a stream of diarrhea behind us.
See you in the Oort Cloud!
My ape brain Yahoo Finance RightLine
Positions: x50 GME at $224