@JohnCena I don't see you but I see you...
$GME
but John, did you know?
👇👇👇 https://t.co/Wcbqo69RuY
Video Transcript AI Summary
The speaker discusses the concept of fake shares in the stock market and how they are created through naked short selling. They mention high-profile businesses like Blockbuster and Toys R Us that have failed due to short selling. The speaker explains that short selling is betting on a stock's price going down, but it can be risky as the price can go up indefinitely. They discuss the GameStop situation in 2021, where short sellers were caught in a short squeeze by the GameStop community. The speaker suggests that short sellers may still be trapped and unable to buy back the stock. They also mention the interconnectedness of the market through leverage and swaps.
Speaker 0: Did you know that the stock market is full of fake shares, as in shares that don't actually exist and were created from nothing? You probably have some of them in your account. Today, we're gonna learn what really happened to Blockbuster and Toys R Us and a couple other businesses. You're gonna learn what really happened with GameStop in 2021, and you're gonna learn why the entire stock market is based on fraud, allegedly. Because before the whole GameStop thing happened the words naked short selling almost never got mentioned.
And when someone did mention it, it was considered a conspiracy theory. But just like a lot of conspiracy theories, things have changed a bit. I'm about to show you a clip of a senior banker at Morgan Stanley given the dirt at great personal risk, I might add.
Speaker 1: What inspired you to talk about it? Well, I I just they're living, you know, they're they're all living in kind of a fake world. You're all illegally and get your results done every day. Every day. And the fact that my fear don't ask questions, You appreciate the order.
And if that involves, you're letting us not make it. You do it anyway. All the prime lenders, they all do it. Consistent like
Speaker 0: So if you're not familiar with what short selling is, When I buy a share of a stock, someone else is selling the share of the stock. Right? And we agree on a price. Short selling is just a way to bet that the price will go down by borrowing a share from someone and you'll pay them back later. Then you sell it on the market, whatever price is going right now.
So if you think this stock is gonna go down, you borrow the share from someone here, you sell it at this price, and you're right. And then later you buy it back and you close the trade out and you make money. The exact opposite as if you had bought the share here hoping to sell the share later when it was at a higher price. Exact opposite. Naked short selling is doing that, but you never even borrow a share.
You just sell a share that did not exist before. Yes. That's as backwards as it announced. But like you just heard the man say, a lot of the biggest institutions do this all the time. Like, you remember this guy that runs Citadel Securities?
Well, this is them getting caught by FINRA for doing exactly that in 2020. Big legal jargon to say, selling something, failing to deliver it and never having had any way to borrow it. These are the kind of market mechanics that make GameStop have a 300% short interest, as meaning 3 times the number of shares that are supposed to exist have been short sold leading into whatever happened in 2021. We'll come back to this in a second. There's a pattern here that's repeated with a number of very high profile businesses that have failed over the last couple of decades, such as Sears.
Something bad happens or the sentiment turns, their stock price starts to decline, the short sellers pile on, they get short sold and short sold and short sold until they go bankrupt. This was Circuit City. This was Pier 1 Imports, and this was Blockbuster, one of the first ones in this pattern. There's another side to this too. Because when a company is failing like this, they almost always hire a consultancy firm to try to help turn the business around.
They charge exorbitant fees for, shall we say, questionable advice. And that's exactly what happened at GameStop while they were getting hammered and short sold and hammered and short sold. And eventually, they hired Boston Consulting Group to come and help turn the company around. But when Ryan Cohen took over shortly before the whole thing happened, the first thing he did was fire Boston Consulting Group and then sue them because he knew what was going on. Because the consultancy group gets paid either way.
If the business fails, they still get paid. And all the short sellers, if the business goes into bankruptcy and ceases to exist, they never even have to buy back the stock at all. And they get 100% pure profit on all of those totally above board short sales tax free. And from the looks of things, GameStop was about to become another blockbuster or another Sears. This is Ken Griffin who runs Citadel, hanging out with his buddy, who it's worth mentioning before he ran a bookstore out of his garage and whatever whatever, he also worked in hedge funds before that.
And you better believe these 2 guys know everyone in the industry, including at the consultancy firms. So GameStop was on its way down to 0, just like a lot of companies before them. And then something crazy happened. Because the thing about short selling is it's actually really dangerous because You're betting on the price going down, but the price can go up as much as there's no limit on how much a price can go up. So your potential loss is infinite.
And when you short sale, the only way to get out of that trade is to buy back the stock that you short sold. And the problem is that buying the stock makes the price go up. This is why a short squeeze can happen because if there's a lot of short sellers that have been short selling a stock and then it starts to go up, all the short sellers need to close those positions. And right before the GameStop thing happened, 300% short interest is insane. Usually, short squeezes happen with, like, 20% short interest.
This is only possible if there are at least 200% shares completely fabricated, made up out of nothing because they don't exist. The GameStop community had officially caught the short sellers in the act, and they had them buy the balls. And in the SEC's own report, the red bars that show short sellers buying back the stock clearly showed that short sellers did not close. If they had tried to buy back 300% of the shares, the price would have gone a lot higher than it did. But this is data from one of the biggest retail brokerages in the United States of a normal month of GameStop trading, showing that green is how many people are buying and red is how many people are selling.
And it's been like this ever since 2021 every month. And the blue line is the price going down with all this buying happening. And these 2 guys that were probably pretty hyped on the biggest video game retailer in the world going out of business because who knows who benefits from that. They probably aren't quite feeling that way anymore about it, which is probably why we had paid ads saying that they closed. Probably why the internet got filled with bots spamming identical messages about how everyone needs to get out because the stock is so bad.
Probably why GameStop stock prices has been crazier than my ex girlfriend ever since. And it might help explain why in December of 2023, Almost half of GameStop trades happen in dark pools. And still today, about half of the trades are short sales. Because when you have exerted enough short selling pressure over many years to drive the stock down to this degree, to the point where short sales are reported at 300% of the float, you might not have any way out. Buying back this much stock would bankrupt you.
And there has been ample evidence ever since that they are still trapped. And that's why all the GameStop people are still holding because they can kick the can a lot, but they can't get out unless they buy the stock back. And there's a lot more rich people than just these 2 guys who are on the hook here. Think about what we've learned this year about how tied together the market is by leverage and swaps. Remember what that man said at the start?
All the prime lenders do it every day. And by it, I mean create shares out of nothing and sell them counterfeit into the market. Now there is a lot more to the story than what I was able to fit into this short video. A lot more evidence of fuckery and a lot of very complex ways for them to hide their trades. But one thing's reserved, no one's selling.
