A Tale of 2 Squeezes (NFT Div Thought Experiment)

CategoriesGME

What if I told you an NFT Dividend may make you a m/b/zillionaire, BEFORE GME moons?

Reminder: the root of a squeeze is an entity being forced to purchase something. That is not limited solely to shares.

(TA;CR – In the event of an NFT dividend, the MO-SS may occur in the NFT market before any stonks. Treat any NFT dividend as if it is an additional share. You have 2 diamond hands, use one for stonks and one for the NFT! I also think this is what RC wants.)

There are 4 important dates for dividends, but really only 3. Announcement Date, Ex-Dividend Date, (Record Date, not important), and Payment Day.

https://preview.redd.it/0yvkjxazp9s71.png?width=624&format=png&auto=webp&s=1e11006c085a3e25357a305fdb714c85f4ac241c

Announcement Date – RC proclaims we have an NFT dividend with an Ex-Dividend date of Apetober 2. Apes rejoice!

*MO-SS opportunity #1, DTCC may say “we can’t distribute this”, but let’s continue…

Each one of the SHFs have a choice:

  1. Buy shares and close short positions
  2. Keep short position and try to cover the dividend

These clowns have between now and Apetober 1 to decide their position. It’s possible that some SHFs are too far gone and/or arrogant to close their positions.

During the time between Announcement and Ex-Dividend Date, there will be buying pressure to close some short positions mixed with some retail FOMO. This will cause the price to shoot up.

*MO-SS opportunity #2, the run up in price makes marge call…

Maybe this causes MO-SS, but unless there is a crazy margin call domino effect, this may not be the end. The evil empire has a lot of money, they may survive this run up.

Ex-Dividend Date – Apetober 2 is here! If you buy today or later, no dividend for you.

Just like other dividend stocks ex-dividend, this bad boy will tank hard! Any GME shares that the SHFs had on hand will be offloaded at this point because they have secured the dividend and need gun powder for covering their short NFTs.

It is at this point where the game switches from the stonk shares to the NFT. The SHFs are now laser focused on being able to cover the NFT dividend come payment date.

Meanwhile, apes need to expect this and remain calm. They were on cloud 9 with the announcement, loved the ride up before the ex-dividend date, and now got punched in the gut. They expected MO-SS, but now see a price drop as they are waiting for NFT delivery. They think to themselves “was I wrong about all of this?” NO!! The best play is still Hodl.

For the SHF’s, they are in the eye of the storm. That run up was scary, but now the price is significantly lower. They have an upcoming obligation to deliver more NFTs than exist. However, that real world liability is not an accounting liability. So their books look good and marge is forced to stay away for now.

Payment Date – This could be a week or more after the ex-dividend date. The NFT is headed to your account.

I have questions on what the NFT will look like in your account, but at the end of the day, the NFT should be available somewhere for trading. Either through the brokerage accounts or on a different exchange.

**This opens up one question I have – If you set your account to “reinvest dividends”, will this cause your account to liquidate the NFT in order to purchase more stock shares?? What setting is needed to make sure I can just hodl the NFT?*\*

Immediately after GME starts issuing the NFT, it’s game on for the SHFs:

  • Any NFTs from (former) long positions, transfer along to cover divvy on part of the shorts and
  • They buy up (or borrow) all the NFTs from institutions to cover another part of the short divvy. Note – The institutions are probably going to wonder WTF to do with this divvy and may sell it cheap or let them borrow it for a low fee.

So the SHFs just transferred millions of NFTs to their synthetic/IOU share obligations. Those shareholders are retail. They now have to buy FROM RETAIL and deliver TO RETAIL accounts. The ball game is now played exclusively between SHFs and Retail.

Delivery of the NFT is the squeeze now!

What about closing their positions on shares? They’ll keep letting that ride and so will the SEC.

While all this is happening, they will claim everything they can to drag out the delivery date.

This is where retail could fail. Imagine I have only 1 NFT banana and there are 10 apes who I each owe 1 banana. Game Over, right? Not so fast my friend. I give the banana to ape #1, buy it back from him, then give it to #2, buy it back from her, and so on down the line. Because there is no clear value for this NFT and apes may not realize that THIS has become the squeeze, I fear many are likely to miss the importance of it.

Apes mental state – The stock price has just run up before the ex-dividend date, plummeted afterwards, and everyone thought it would be Valhalla by now. There will be temptation for paper hands to sell the NFT for a low price and just walk away, that’s exactly what the SHFs want! It’s also the only way they survive.

Similar to DRS-ing shares to get them away from the DTCC and brokers, apes need to get their NFT away from the brokers ASAP. That eliminates any of the funny business plaguing that system.

If retail hodls the NFTs, the NFT market becomes the MO-SS. SHFs have to pay whatever price, however many times to keep buying NFTs until marge calls. Keep in mind, there is a shot clock here, they cannot fail to deliver the dividend*.

Once the NFT auction process has liquidated most SHFs, that’s when we see the take off in ‘meme stocks’ due to the closing of their short positions. Shorted stocks become the secondary squeeze.

*I believe action will be taken if they do not deliver dividends. This is too public now and this will be a “new situation”, so it’s easier for them to save face. (Politically, it’s harder to bust them for an action that has been consistently going on under their watch. Cuz you basically admit to falling asleep in the past.) They can easily claim that “they have never allowed hedge funds to miss a dividend obligation and enforcing this shows they protect the public”. What would we do without them!? /s

To Summarize – In the scenario above, the craziness starts & ends in the NFT market. The MO-SS in shorted stocks is the only the effect of that. I think this is what RC wants.

He can announce an innocent, cute NFT dividend to thank his shareholders. The initial media narrative will have to be favorable, extolling the importance of customer engagement!

During the NFT squeeze, the media/political narrative of speculation & social media investing is eliminated. If CNBC pulls up the GME ticker while the SHFs are drowning, not much movement! They can try to claim crypto speculation, but the story is forced to focus on the failure to deliver a dividend and the now obvious abuses within the system. Any subsequent squeeze in ‘meme stocks’ is correctly categorized as a result of the ‘evil’ SHFs abusive shorting behavior.

Note – I understand the MO-SS can come sooner, but I wanted to experiment with the longest case scenario. It’s easier to train for a marathon and run a 5k, than doing the reverse.

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