Chives

repo participants are on the hook for long term bubbles. think LTCM and 2008. so they sell swaps on indexes and etfs and redeem the swaps, to cover the debts of the bubbles. +rehypothecate them at the block trade level so others cant see whats going on at the swap record level.

I wonder if $GME has not yet announced their $BTC acquisition because they have a precise strategy for supply and demand of their notes. one data point that stands out to me last spring for $GME is the end of May and I think it will be worth watching this year again for the same reason. from Friday May 24 to Tuesday May 28 2024, the price of GameStop went from a low of 17.70$ to a high of 26.66$, a 51% difference from one trading day to the next. it was also accompanied by 105 million volume and I believe the reason for it was forced settlement due to April OPEX. it turns out that Tuesday May 28 was exactly T+3 and C+35 from April 18. notably, DFV was not posting during this week and returned with the reverse uno on June 2—I believe, communicating the change from buying pressure to market settlement dynamics that would be impacting the price action for $GME. it also served as a data point that confirmed what was coming. — it is not chance that GameStop does really well raising capital in June. in 2021, raising 1 billion and in 2024, raising another 2.137 billion. I believe it is a combination of three factors: • the juggling of the April OPEX fails; • ETF rebalancing upcoming; • the uncertainty of price reaction to Q1 earnings. the third piece plays a critical role and I believe explains with RC and Co. are waiting to announce their Bitcoin acquisition. from the data, it appears that no one last year wanted to wait and risk going to get their $GME shares for rebalancing after the Q1 earnings and so we saw a lot of volatility within the first week, at the end of which $GME successfully did their ATM. this year, despite the Convertible Notes providing locates in the near-term we do not see a reduction in fails. again, the Notes Offering is absolute confirmation in my opinion that RC and the Board have an excellent understanding of the market patterns surrounding their common stock. GME 2024— 1,337,167 GME 2025— 1,096,015 an 18% decrease; XRT 2024— 3,747,838 XRT 2025— 5,440,337 a 45% increase! despite the Notes, the fails are through the roof and that's very encouraging. what stands out to me and how I believe the Board knows what is going on is that the Notes were offered exactly on the day that is T+3, C+35 from February 21. February 21 recorded 1.14 million fails for $XRT (!!) and by announcing the Notes a few days prior, RC and Co. created a huge demand for their Offering and ensured that they would be able to raise as much money as they wanted. brilliant. by not yet having disclosed a Bitcoin purchase, RC has created a dynamic where no one will be willing to risk not getting their real GME shares for $XRT ETF rebalancing before earnings, because of the uncertainty around Q1 with 6.2 billion dollars on the balance sheet and what if.. the Bitcoin purchase is disclosed at that time? the real risk exists that the share price may be much higher compared to a week earlier. this concentrated window of time combined with anticipated extreme demand at the same time could create a lot of unexpected volatility. it would also be a perfect moment for the GME Board to offer a second Convertible Note Offering, (they love June for raising money) at a time of elevated price and volume. they could demand higher conversion prices, securing even more money for the balance sheet now, for conversion-eligible dilution much later. this is not letting shorts off the hook, in fact it could not be more opposite! it is project rocket: more money now, more Bitcoin, further price appreciation. when supply and demand are in your favour, you decide the price—remember the water bottle example from a previous post? issuing Notes is the path to turn shorts into buyers. when they are not short, there is no ongoing incentive to continue juggling ETF fails. that will be the moment when GameStop will begin to be fairly priced by the market. if not, then the Bitcoin will. that is why it was named project rocket.