Today I Want to talk about how the shorts are about to tap out and accept the squeeze? I Want to explain how they're trapped with dwindling cash reserves, why they'll soon be margin called in this dog eat dog world, and also explain how they're terrified of a split with yet another lawsuit. So stay tuned and let's make some money. and now I'll drive straight in with accumulation. So Top G tweet is saying he took some of his time to explain what will happen to the AMC price with the split and without the split.

But I want to explain why I think that this isn't actually true So he tweeted saying let me make it very clear, the high cost to borrow for a stock is not at all bullish. A thousand percent borrow fees for AMC doesn't actually make it bullish for ANC He said the reason is is because the shorts are happy to pay one thousand percent borrow fees because they still think they're going to be profitable on their AMC short position. He said anyone that's saying the hedge funds are trapped is wrong But as I said I want to explain why I don't think that's quite correct now. Top: G Explained he thinks the shorts are happy to pay one thousand percent borrowing fee because they're still going to be profitable on their short position regardless of those borrowing costs.

Okay, basically saying they're shorting profits minus that borrowing fee will still leave them profitable and with cash at the end. But as I said, let me explain why this isn't actually correct and why the shorts are indeed actually trapped. So the maximum profit these shorts can generate on their AMC short position is if AMC Falls from five dollars per share all the way to zero dollars per share and goes bankrupt. Now if AMC Falls from five dollars per share to zero dollars per share, that's a 100 gain or five dollars per share as a game.

If they short a million shares at five dollars per share and it goes all the way to zero, that's a five million dollar profit. Now the AMC cost to borrow is one thousand percent. and if you didn't know one thousand percent in borrowing fees is larger than a potential profit it of one hundred percent. The number one thousand percent is a bigger number than one hundred percent.

To put that in terms of dollars, these shorts are paying fifty dollars per year When they know their maximum profit they can generate on their short position is a further five dollars. And if they borrow one million shares at fifty dollars per share per year, that's a 50 million dollar loss on borrowing fees alone. And obviously 50 million dollars of borrowing fees against five million dollars of profit if AMC goes all the way to zero is still a 45 million dollar loss. The only way these shorts can be profitable on their short positions is if AMC goes to zero and they generate that 100 profit before they pay 100 in borrowing fees.

For example, if Ames he goes bankrupt in 10 days, the Shorts only spent 20 on their borrowing fee, they generate that 100 profit on their short. as AMC goes bankrupt, take off that 20 percent borrowing fee and still made an 80 profit. But if they continue shorting AMC and aims, he doesn't go bankrupt for a full year. They've made less than 100 profit on their Shore and still paid a thousand percent interest on their borrowing fees.

Basically saying, AMC has to go bankrupt in just 25 days or they've effectively lost money because they've paid more than 100 in borrowing fees and obviously haven't made a hundred percent on their short position. So in fact, the short sellers paying these 1 000 borrowing fees either means they expect AMC to go bankrupt in less than 25 days. Or more likely, they're stuck in their short position and cannot. Escape Also, you can currently get a guaranteed free share of Tesla and a cash reward which you could always use to buy more shares of AMC GameStop or a vape.

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They've got tons of technical indicators and even their own options trading platform. But interestingly, Wasteland Capital Tweet is saying people seem to ignore. All people seem to forget that interest rates are a zero sum game. He said, one person's interest expense like these shorts paying that borrowing fee very literally is another person's interest income.

Obviously if these shorts are locating and borrowing shares, even if they're not locating and borrowing all the shares, they're still borrowing shares from somewhere and paying that borrowing fee. Someone I Wonder if it was potentially BlackRock and Vanguard's plan all along to keep these shorts trapped in their short position paying the Sky High borrowing fees Because obviously we know it's not AMC retail investors that are lending out those shares. it's likely Vanguard and BlackRock And at the moment, BlackRock and Vanguard are making money hand over face by lending out those AMC shares clearly for massive profits. And I wonder if that was their plan to sucker in these shorts thinking AMC would go bankrupt just to trap them in their illegal short position charging them Sky High Borrowing Fees Now John Also, tweet is saying one thing the stock market has taught me in the last two years holding EMC is that hedge funds and market makers can do whatever they want with zero repercussions with no investigations with no margin calls with no regulation and no SEC rules being followed.

Now again, while I do think the Shorts have had zero investigations and regulation enforcement, what I don't believe is that Shorts can escape margin calls. So again, let me explain why. So you know that Citadel borrows the majority of their margin from Bank of America Citadel has a fund of 350 billion dollars has cash of their owner 50 billion dollars using this seven to one leverage ratio. So that means Citadel has 50 billion dollars in cash and Bank of America is giving them an additional 300 billion dollars.

Now, what happens if Citadel loses 60 billion dollars cumulatively on their trades through 2022, and through shorting other stocks like tech stocks and growth stocks so far in 2023? Well, obviously the first 50 billion is absorbed by Citadel, leaving them with zero dollars, losing that entire 50 billion dollars in cash. The remaining 10 billion loss. It's actually Bank of America that loses 10 billion dollars now. Bank of America may be able to take that loss on the Chin.

We know they've already lost a hundred billion dollars last year on bonds, and we know that Credit Suisse lost 5 or 10 billion from Arcados and a bunch of other Banks also lost billions and billions of dollars from arcade costs too. These Banks clearly aren't too worried about losing a few billion here or there and therefore often allow these hedge funds and market makers to exceed their margin requirements without margin calling them. But let's say Citadel actually lost 150 billion dollars. Obviously Citadel only he has 50 billion in cash, so the first 50 billion is absorbed by Citadel But that means the additional 100 billion dollar loss is suffered by Bank of America Now, while Bank of America may be able to tolerate a couple billion here or there, maybe even 10 or 20 billion for a brilliant client like Citadel I Don't think they'd be happy with a 100 billion dollar loss in this dog eat dog world.

Don't forget these Banks and hedge funds are competing against each other. They may help each other out every now and then with a couple billion dollars in loans here and there. But all of a sudden, One Bank or hedge fund isn't going to be happy losing tens or hundreds of billions of dollars if it's not their own fault, but a different Hedge funds full Bank of America may give Sid Nelson Leeway and say guys, it's okay that you've lost 5 or 10 billion dollars. We've got you.

But all of a sudden, when that 5 or 10 billion dollar loss turns into a hundred billion dollars in losses or even more, all of a sudden, Bank of America somewhere will will pull the plug I Don't know how far they need to exceed those margin requirements, whether it's by two percent, ten percent, twenty five percent, fifty percent, or even more. But at some point Bank of America will indeed pull the plug so it's clear to see the shorts are indeed trapped as they're paying one thousand percent borrowing costs against the maximum potential profit of one hundred percent unless they expect AMC to go bankrupt in just 25 days and at some point their luck will indeed run out and they will be margin called by Bank of America And we can also see these shorts are indeed petrified of the EMC reverse split as a third lawsuit has just been opened up against AMC This is an emergency application to review and throw out the settlement brought by David deemedris. But as Gian tweeted, he said nice, try it will be dismissed because Delaware Corp Law now states that Companies Incorporated in Delaware can authorize corporate action by passing a stockholder vote. As Stephanie added, she said this smells of desperation.

If you think the reverse split is good for the shorts, this should show you that it kills them. She said they are fighting so hard to delay or cancel the reverse split. starting lawsuit after lawsuit after lawsuit becomes added saying they are scared to death of this conversion because it kills their short thesis. so they're going to do anything they possibly can to store that conversion and reverse split.

He said if people can't figure out that the reverse split screws the shorts I don't know what to tell them I Think this combines so perfectly with the fact that shorts have lost control of cost to borrow, they've lost control of fail to delivers and all they're trying to do to escape their positions now is to start lawsuit after lawsuit. I Also saw this really interesting tweet from Susan trimbath that she thinks is talking about sharing tail Now this is taken from an interview of a senior employee Overstock and he said Overstock asked me to work with a service provider likely share Intel to help them look more deeply at the available records available from their transfer agent and from the DTC He said when I met with the head of the service provider at the insistence of Overstock's lawyers, the company CEO of share Intel offered me compensation to recommend his services, but his personal review and due diligence found nothing to convince him that there was value in sharing those service. After looking at the product they were providing I warned over stock and a few other companies that the service had no value because the information is freely available elsewhere. Overstock insisted that they wanted me to review all their reports and provide Overstock with an opinion of the value in the sharing to work.

but you said by meeting with the CEO and a few subsequent phone calls with his staff only confirmed what I already knew Not only was there no value in this service, but it was also giving him incorrect information about his shareholders and the potential fan. Phantom shares in circulation and Susan ad is saying NSG readers which is the magazine or publication that this interview is published in saying they may have already figured out who this company is and she said I know that Adam Aaron did Basically saying that Susan trimboth believes Adam Aaron knows that Sharon tell is pretty much useless and that's why Adam Aaron never engaged chair and tell especially when you think about all of the other companies that have engaged Share Intel like Mullen Finger Motion and a bunch of other companies that have definitely not seen a squeeze since engaging with Share Intel It's likely that Share Intel just drains money from these companies even further. And it's maybe even possible that Share Intel is actually working with shorts. But guys, be sure to let me know what you think down in the comments below.

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