Hi all,
u/quip_slip here!
Okay so full disclosure I have been following the GME squeeze since January and have read a lot of the DD and own a lot of GME shares.
My intro to SPRT was through u/repos39 ‘s DD and I was really taken in by his talk about the FTD’s on the 15th(?) Of June and the potential run up we would see on the 20th of July. I have been highly interested in the t+21 and t+35 theories created by u/criand in explaining GME and the journey to figure out what the hell is going on.
I had initially believed u/repos39 had called the price movements right to a T after seeing the run up from the 20th to the 27th of July but after looking at the price of bitcoin I started to question if SPRT has just been tailing bitcoin. Could it be that some rational being was actually calculating a fair price for the company based on the value of bitcoin? After looking into the charts myself this was not as straightforward as I initially thought it would be.
For reference the market cap of Bitcoin is around 4000x higher than that of SPRT.
Looking at the charts to compare bitcoin with SPRT we can see that after the announcement of the merger between SPRT and GREE there are clear similarities in the trends between SPRT(tickers) and BITCOIN (orange).
These two follow the same trend but what is most confusing to me is that actually I would argue that bitcoin is following SPRT. This is counter to what I expected to find and it is quite hard to explain. I have come up with the following possible reasons:
- Correlation does not equal causation. Despite appearing to be moving in the same direction this is just a coincidence and the price is related by something else.
- The price movements of both bitcoin and SPRT are primarily controlled by computers who are rigging the price movements to follow particular patterns.
I don't know that I believe that either of these is true I just can't think of anything else.
Now what is very interesting is that this relationship becomes most clearly disconnected at one point and that is ~MAY 24 at the exact same time that GME (blue) and AMC (yellow) go for a run. I think it is safe to say that this is action driven by short positions.
At around the 10th of June the relationship between bitcoin and SPRT becomes clear again however the period in time from the 1st of July to around the 9th of July looks highly suspicious and disconnected from the bitcoin price. The volume on the 7th of July was also relatively high when viewed against neighbouring days.
I don’t know what happened but I think something happened here. Was a new law introduced ?
Also worth noting that at the same time there was quite a sharp drop in both AMC and GME. Are all these things related?
Two weeks later more odd activity occurs at around the 19th to 26th of July. This is the date at which u/repos39 did anticipate some movement.
Bitcoin falls at the same time that AMC, GME, and SPRT head up with SPRT being the most volatile of all the stocks.
The bitcoin price rise on the 26th is speculated to being a result of shorts covering or being liquidated. I don’t know what the source of this belief or if its purely speculation. If this is true I would speculate that this entity was short on the ‘basket’ of meme stocks (https://www.reddit.com/r/Superstonk/comments/ov0g8s/the_bucket_short_gme_was_shorted_with_a_group_of/.) because the first and second jump in the bitcoin price occur while the meme stocks are heading up and the price of bitcoin only holds steady while the meme stocks are heading down.
A counter explanation could be that meme stocks heading up could of hyped speculators into buying into other risky assets like bitcoin. I don’t think this would explain the spikes in the bitcoin price though, and logically I would imagine that if these people did exist, that they would put there money in the risky asset that they see going up and which has spiked their interest.
I do think that in the most recent week the price has been quite related to BITCOIN, however I think the swing in price up on the 27/28th of July and down on the 3rd or August appear a little exaggerated.
My observations and beliefs are that:
- The price of SPRT and BITCOIN are often quite related as you would expect
- The price of SPRT and other memestocks are in some instances quite related and it as it these times that a separation between SPRT and BITCOIN can be observed
- In the months of March April and May the price of bitcoin appears to follow SPRT instead of the other way around (Just an observation)
- Most recently the price appears to be more related to bitcoin than to memestocks
- The dates where it appears that shorts have had to cover on SPRT (and other memestocks) is most notably:
- The 24th may to around the 10th of June
- The 19th of July to around the 26th of July
- During these runs SPRT has increased by around 100% in value each time and has a much less noticeable decline in price following these events than other memestocks
For SPRT I think it is hard to say how much the merger will affect the price going forward. My understanding of the price movement of SPRT is that the merger instantly raised the price and since that point in time the price of bitcoin and SPRT has been somewhat correlated. I haven’t read too much into the details myself and am relying on DD by others in understanding the merger.
Going forward I believe that this stock will potentially yield a greater return than the other meme stocks due to the open build up in short positions. When the open interest in GME was at its highest it had its greatest run and i think the same may be true for AMC. I do think that all these different meme stocks with high SI% (hidden or not hidden) will inherently squeeze together because the correlation between these stocks suggests to me that someone has a bucket short as suggested in this DD https://www.reddit.com/r/Superstonk/comments/ov0g8s/the_bucket_short_gme_was_shorted_with_a_group_of/.
I know that others have estimated a fair value of $7-$8 for the stock. Buying a stock at fair value with potential infinite upside due to a short squeeze is a great investment.
Yesterdays increase in price for GME and AMC and the spike for SPRT could potentially herald a new run for meme stocks although i am not counting on it or expecting it to be likely.
I personally don’t think a merger announcement will cause a squeeze. I do think that the squeeze is inevitable and that the squeeze will occur for multiple stocks probably all at the same time.
All shorts must cover.
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