Welcome back to the channel everyone today, i want to talk about how melvin capital is selling everything and could be an archagos version. Two so stay tuned and let's make some money, and now i'm gon na dive straight in with the key information, so nazim tweeted, saying according to sec filing form d on december 30th, 2021 melvin capital has saw an estimated 4.3 billion dollars of private placements in transactions. Done in offshore limited accounts in the cayman islands, things are about to get really interesting, so i've managed to find that full form defiling, obviously for melvin capital, offshore limited registered in the cayman islands. Now, if we scroll down it shows that they're not making any offerings, but they have sold 4.3 billion dollars of u.s securities.

Now initially i was thinking this was an offering of securities form and melvin capital were asking for a 4.3 billion dollar bailout or asking for a 4.3 billion dollar investment. But if anything, it seems that it may actually be much worse and melbourne. Capital may have bailed out of pretty much all of their long positions in order to support their gamestop and amc shorts. We know that at one point last year, melvin capital had around 12 billion dollars.

Obviously, at one point they were down nearly 70 percent on their gamestop shorts and managed to end the year down around 30 to 40 percent. Dave lauer also noted that melvin capital is down 25 month to date and has therefore lost even more of their portfolio. If you take melvin's, 12 billion portfolio drop it by around 40 and then drop it by another 25 you're left with somewhere around 5.4 billion dollars, maybe around 1.1 billion of that is tied up in leveraged amc and gamestop shorts and therefore they had to sell off The remainder of their portfolio in order to support those shorts. Now you might ask well tom what actually is a form d and what does a form d actually do from the sec website? It says form d is used to file a notice of an exempt offering of securities with the sec, an exempt offering of securities being an exempt sale of securities, most likely done through the otc counter and not just dumped onto the open market.

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But i don't think this is the right move for them because, as other short hedge funds get liquidated because of the falling market, they'll be forced to cover their shorts and amc and gamestop will run up. And obviously, when amc and gamestop run, melvin will be massively massively underwater on their short position. They'll fail their margin, requirements and margin, tests and melvin will also be liquidated and forced to cover their shorts. I think we'll have to see how the rest of this week plays out, but i think when the s p 500 falls under these recent lows around the 420 mark, then things will start to really get nasty and we will see other hedge funds being liquidated.

I think, under this 420 mark, we are in real bare territory and there's very, very little support until somewhere around here around the 320 territory. So why could melvin capital turn into the next arcade goss or arcagos version 2.? This poster on reddit says, i suspect, the gamestop congressional hearing was all a show to put the faces front and center for people to remember them later. Should the dtcc need to liquidate major members citadel robin hood and melvin capital were marked for death when they appeared before congress, they were the chosen full guys. Obviously, as i said in my video earlier, the fed and the wider government couldn't allow some of the major institutions like bank of america, jp morgan, citibank, goldman sachs and many others to fail, because it will mean that hundreds of millions of americans lose their savings and Their pensions, the government can't afford for this to happen, and they can't afford to ruin hundreds of millions of people's lives and therefore these major institutions and big banks will need bailouts.

They'll also need somebody to pin the blame on those over leveraged shorts, just like citadel robin hood and melvin capital. Now, obviously, you could argue that robin hood isn't exactly an over leveraged short melvin capital definitely are and citadel are both an over leveraged short and a dodgy market maker, and therefore these three are the perfect full guys. The dtcc has been working towards its own survival. Ever since those hearings creating rules galore to handle liquidations, we know there's been tons and tons of regulations proposed and approved recently, such as the new margin requirements such as the new securities financing transactions proposed rules and such as the new short selling transparency proposed rules.

These rules will make it easier for the dtcc to liquidate hedge funds and hopefully won't cause as much damage as there'll, be these sfts or securities financing transactions in place. One of the biggest hurdles the dtcc had, though, was this idiosyncratic stock had so many open call options that should it squeeze too early, it could literally have been a bomb that fully destroyed the entire stock market. As i said, if this gamestop and amc squeeze isn't handled appropriately, then some of these major institutions, like bank of america will be going under and millions of americans will be losing their savings. The fed and the wider government obviously doesn't want this to happen at pretty much all costs and they will issue a bailout, but obviously they need to do it safely and they need some full guys.

He says i suspect the dtcc themselves have been running the show for citadel for most of this last year or, at the very least, know exactly what citadel is doing every step of the way. So what did the dtcc? Do they created and amended a zillion rules handling liquidations of its members, this added a major buffer to themselves, while forcing its members to have substantially more and better collateral. I think the dtcc has been trying to let different stocks run at different times to try and avoid all of these meme stocks running at exactly the same time, causing guaranteed liquidations. Obviously, over the last few weeks and months we saw bbig go on another run.

We saw dwac and phun go on a run before that. We had amc and before that, back in january we had gamestop, and he says when the massive number of calls finished out of the money this past friday. I believe the mother of all short squeezes has been cleared for takeoff from a major boss at the dtcc, based on the news coming out today. I think we'll see melvin get liquidated very soon.

I also think the dtcc will load up. The worst fell to delivers into melvin, so it will be an explosion bigger than our cagos was. Maybe this is what lou was talking about when he said that citadel have offloaded their short position. Maybe citadel have offloaded their shorts to melvin just so that melvin blows up, holding everything at least that way, it's only one or two hedge funds being liquidated, not 10 or 20 or 30..

If it's effectively just melvin that blows up holding everything, then it's only one fun to liquidate, and he reckons that this liquidation will have a massive amount of amc in gamestop shorts that fail to delivers the swaps that have gone bad and everything else they've been using To kick the can, and he says, but as bad as this will look, it's likely the tip of the iceberg to what still has to be resolved. He says that tip of the iceberg is going to create some massive nastiness in the markets or a market crash. I suspect the dtcc will force a few others to fail as well potentially credit suisse, perhaps a bank or two and likely even citadel themselves, and he says, while the rest of the market implodes we'll get some version of the mother of all short squeezes. I say some version because i still expect some malarkey to take place somewhere, whether the squeeze is controlled or limited by the sec by the fed or by the wider government.

And i think this is how the negative beta for amc is going to kick in. While the rest of the market is crashing and those hedge funds are losing their ass on their lung positions and get liquidated, they'll then be forced to cover their amc shorts and therefore, while the market is crashing and it reaches that point of critical mass, that's when Amc will start a squeeze when those hedge funds are actually getting liquidated. That's when a squeeze will happen. While hedge funds are shorting the market and just selling off some of their long positions, it won't cause the squeeze, it will just add to the market crash.

But when the market has crashed so much the hedge funds get liquidated, that's when the squeeze will happen guys be sure to. Let me know down in the comments below what you think about melbourne capital selling off everything and as always guys, if you enjoyed this video, be sure to check out some others. Alternatively, subscribe to the channel and ding that notification bell, because that way, you'll be alerted when i upload a new video cheers.