You may have read or heard that the DRS% has gone down from 55% to 48%.
Morpheus: “What if I told you the DRS numbers haven’t changed, the institutions have sold 20M+ shares in the last 3 months making it appear as so.”
Keep in mind, the bot is a guesstimate and such my math is not using exact numbers but to my knowledge the formula checks out.
Retail DRS # is still the same as it was yesterday (if not higher 😉). This means to lose a net 7% of free float DRS, the free float must be larger. How much larger?
74665000(DRS💜)/55% 135754545 (old free float)
74665000/48%=156148554 (current free float).
It’s not actually quite 48% so the math doesn’t 100% check
Empirical commander: “it’s bad math but it checks out”
How does that happen? (I wish I had the scource for this) but basically institutions sell into our pool. This sale, and sales of this type, are reported every 3 months. Meaning over the last 3 months they have sold the difference in free floats.
156148554(new)-135754545(old) =20.394M shares sold by institutions
How does this help retail? A: well before institutions sell they need to recall the shares. This positively impacts the price as the borrowers who’ve sold the shares need to go into the market to re-acquire these shares. Don’t believe me? Go look at the 3 month chart.
To bring it back to the phoney 48%. Apes are not selling. Hedgies are, as they run out of shares to sell, recalls will force the price up. The only way to counter this positive price movement is to lend more shares to the shooters to be sold short.
One could speculate on why they are selling (could be to establish liquidity as the broader market declines) but that’s not what this post is getting at.
Edit: For those of you looking for a source on the reported institutional sales here it is
TLDR: DRS train is full track speed running smooth as ever and as the institutions sell off, the true longs will profit due to recalls 🟣🚂🤑.