The following post is by a Disqus friend who calls himself GMan:

For anyone with the patience of Job, I offer the following LONG writeup I created for my family summarizing the events of GameStop leading up to this week.

Summary of GameStop & Those Darned Internet Collusionists

In a family email among my father and siblings, the topic of GameStop came up. My brother wrote: “A recent Reuters article details how a large number of small investors is manipulating specific stocks with intent to take money from institutional short-sellers. So, if one guy does it, he gets the slammer. But, if a bunch of folks do it, they can get away with it. In other words, if everybody is doing it, it must be okay.”

Knowing my brother would never admit to being wrong, I still took it upon myself to write a rebuttal. I am sharing this because it may serve as a template for a better writer to summarize events faithfully.

The Reddit group discussing GameStop has been doing so for over a year. A Redditor going by the name of DeepFuckingValue (pardon the French, sis) first posted 16 months ago. He saw that the company was turning things around, but was priced for bankruptcy. As his moniker suggests, he saw deep value in the company. He was ridiculed, but he believed and put his life savings into stock and long-term call options over a year out. Let’s call him DFV.

During this time, DFV provided updates about major progress the company was making. He also noted the company stock was sold short over 100%. Meaning institutions had borrowed shares and sold them again and again, until they had sold more shares than exist. More reason to own the stock.

Last year, the stock price dipped below $3. The short positions had made profit anywhere from 50-90%. They could have begun to unwind their profitable positions, but if the company went bankrupt, they would make 100%. The chose to bet for the death of the company.

Also last year, the company did major reorganization and rethinking of their business model. They brought in Reggie Fils-Aime , the former president of Nintendo who is beloved by gamers. Then Dr. Michael Burry (The Big Short) bought something like 4% of the company. Then Ryan Cohen, founder of internet sensation Chewy, bought about 9% of the company.

DFV posted about all these things. Much discussion and additional research ensued. People started noticing and the share price crept up to around $8. Meanwhile, the shorts kept their (less) profitable positions open.

When 3Q earnings were about to be posted, Ryan Cohen wrote a letter to the board outlining the modernization efforts that must be completed. This was a veiled threat of hostile takeover, as Cohen is a billionaire from creating Chewy, competing against Amazon, and winning. He sold the company for $3B.

The board responded by giving themselves the option to issue $100M in new shares to fight off takeover. Cohen responded by buying about 4% more of the company.

DFV and his growing fans discussed all this. GameStop paid down all their 2020 debt early and has a few hundred million in the bank. They are closing unprofitable stores. New PlayStation and Xbox consoles are coming for Christmas. All this news was discussed. More and more people got interested.

When 3Q earnings were released, their revenues dropped year over year, but their margins improved. Their online sales increased over 300%. The stock dropped from about 17 to below 14.

DFV and others were pounding the drum saying this is like buying a startup that already has infrastructure, suppliers, and expertise onboard.

Then GameStop and Cohen struck a deal to have Cohen and two former Chewy execs added to the board. Now 4 of 9 board members are internet or game experts.

By this point, other Redditors started compiling their own analysis and published it at GMEDD.com. I suggest anyone who has an opinion about this read the three pages.

Meanwhile the short positions went from profitable to break even to unprofitable. They began to manipulate the market by selling naked shorts. This practice is illegal. It can be tracked by when the short seller fails to deliver the shares sold.

These failures are tracked by the NYSE Threshold List published at:

https://www.nyse.com/regula…

The SEC requires the publication of the list, so that illegal activity can be tracked publicly.

One day on the list is an accident.

Two days in a row is coincidence.

Three days in a row is enemy action.

GameStop has been on the NYSE Threshold List every trading day since 8 Dec. Redditors have been flooding the SEC with demands they enforce the law for weeks. Meanwhile, GameStop continues to be over 100% sold short and is the most over shorted stock by double digits.

DFV who continues to hold despite massive, life-altering unrealized gains.

This month, the stock price started to move up. The Reddit discussion group grew from about 1.7M to 2.2M in a week. Word spread and a lot of folks jumped on the bandwagon. It has more than

doubled in size again.

What concerns me is:

1. The SEC refuses to investigate the illegal naked shorting.

2. That a company can be sold short over 100%.

3. That hedge funds can bet against American companies using pension funds.

4. That the press is so incompetent and compromised that very few, if any of the facts I detail above are ever reported.

5. That the free association and free speech of an internet discussion group is reported as collusion or a

conspiracy done on a public forum. How can people collude to manipulate the market by buying and holding stock in an American company on the rebound?

6, Novice investors can get authorization to trade options without even fundamental understanding.

Mostly, I’m furious that the big money behind all this has the press in their pocket to the point that people I

respect can be convinced there’s something nefarious about investing in a recovering company.

Meanwhile, the stock price continues to be manipulated by hedge funds using naked shorting to push down the price, discourage investors, and redirect blame. There is no evidence the shorts are covering their positions. They believe they can weather the storm by getting government intervention on their behalf, and not being compelled to keep their promises at market prices.

People are getting hurt. Free speech and free association are not to blame.

Calls for reform are pointless if the existing laws are not enforced. In fact, they are a distraction to prevent

the enforcement of current law which were “reform” when enacted. The outrage is being astroturfed to appear to be genuine public concern. The real culprits are being protected.

Enforce the law. Risk management must be taken to maintain existing financial operations standards required of them, but it’s painful for the fund managers. They will avoid it if they know the government won’t enforce the law.

This is gaslighting against the democratization of capital.

Thank you for coming to my TED talk.

Here are a couple of videos that I also found very helpful in understanding what this is all about:

Barry James can barely contain his laughter over the “Oh so serious” financial journalists. Very fun.

This is from one of the most vocal posters on the WallStreetBets subreddit.

Charmath is one of the leading minds on all things trading.