1. The biggest reason that influences everything - Bungie is a company owned by a group of shareholders that will always force the studio to grow and provide more profit. With every extra dollar, the value of the company grows and the board of directors gets richer and because of the super predatory capitalism we live in now, Bungie has to justify every single decision with a monetary value. It's not the fault of the devs, they don't make much money themselves.
2. The game is massive and always online. I’m pretty confident that no other studio would be able to support Destiny for so long without the game completely crashing down. Technology always evolves and it’s almost impossible to keep a living game up to date, so some parts of the front end of the game will always suck because Bungie has to upkeep the back end we will never get to see.
3. The project has been going on for a decade, which leads to people wanting to naturally move on. Replacing team members on a living game is very difficult, which leads to problems and delays.
4. The community is not educated about the game enough, which is why I ended up writing this. The continuous cycle of negative outrage that comes from a lack of understanding damages the game because the devs are forced to deal with it without disclosing information. If people knew more, they could help Bungie, but no company that wants to make big profits will ever open up its communication because it would show just how many decisions are influenced by the search for profit.

WSB USERS: PLS DON'T SPAM!

• Delta: For every $1 move in the underlying, your option's price/value will change by delta.
  • For example: If your delta is 0.25 (or 25, same thing), then the value of your option will increase by $0.25 for each $1 the underlying increase. I.e. Stock goes from $5 to $6, then your $1.00/share call increases to $1.25/share, netting you a profit of $25. Stock goes from $5 to $4, then your call decreases to $0.75/share, netting you a loss of $25.
  • Long calls are positive (+) delta, short calls are negative (-) delta; long puts are (-) delta, short puts are (+) delta. Delta gets larger in magnitude as you go in-the-money (ITM) and smaller as you go out-of-the-money (OTM).
    • At-the-money options (ATM) have a delta of approximately 0.50. The delta of deep ITM options approaches 1.0 as you go further into the money. The delta of deep OTM options approaches 0.0 as you go further out of the money.
• Gamma: For every $1 move in the underlying, your delta will change by gamma.
  • If you have taken any basic physics course, this will sound like acceleration to you...because it basically is. It's the 2nd order derivative of your option's value function.
  • If you have no idea what any of the above means, think about gamma as the gas pedal in your wife's boyfriend's car: when he floors the gas pedal, the car goes faster and faster, increasing in speed exponentially. Once the car starts moving, it starts picking up speed rapidly because of the acceleration, and you go flying into the back of the trunk as your wife gives her boyfriend a quick handie in the front seat.
  • Long options all have positive (+) gamma, regardless if they're a put or a call; short options all have negative (-) gamma. Gamma is largest at-the-money (ATM) and decreases as you move both ITM and OTM.
  • For example: Delta is 0.25, gamma is 0.05, underlying price is $7. As price goes from $7 to $8 (approaching your $10 strike), delta increases by gamma to 0.30 and gamma increases to 0.10. As price then goes from $8 to $9, delta increases to 0.40 and gamma increases to 0.15. As price increases from $9 to $10, delta increases to 0.55.

As gamma increases, delta grows exponentially...and gamma increases because you are approaching the strike price. If that makes sense, then you basically understand how a gamma squeeze works.

When you buy an option, another degenerate isn't selling it to you- a market maker is.

How do MM's hedge options?

Because MM's have negative gamma, their delta gets larger in size. Negative gamma creates gamma squeezes.

Everytime MM's adjust their hedge by buying more shares, that can potentially further increase the price. This means delta will increase, and force MM's to buy even more shares to re-re-hedge.

Gamma squeezes don't happen all the time. You need the proper setup for a stock to get "gamma squeezed." That setup involves leverage and HUUUGE (like the size of your wife's-boyfriend's-dong big) AMOUNTS of deep OTM options, two things every fucker here loves.

MM's actively hedge during the day as price moves, so that means they had to keep buying shares as price moved closer and closer to $60. Because of this, gamma squeezes happen during market hours.

Now that you hopefully understand the basics of a gamma squeeze, I want to re-emphasize one point: YOU NEED HUGE AMOUNTS OF DEEP OTM CALLS FOR A GAMMA SQUEEZE.

So those deep OTM options that fueled the first gamma squeeze are now multiple times more expensive, which leads to significantly decreased purchasing and thus cripples the prospects for a gamma squeeze.

1. A gamma squeeze almost undoubtedly contributed to GME's rise, but I think whales took over after the initial squeeze and kept pumping the price. Maybe some shorts covered somewhere in there too. I honestly have no idea, which is why I'm not touching GME - although I am rooting for you monkeys to become bajillionaires.
2. In my opinion, GME is not currently setup for an upwards gamma squeeze because there is not enough deep OTM call buying. When you compare recent volume with what happened 2 weeks ago, it becomes obvious we're no where near setup for a call gamma squeeze
3. HOWEVER; as IV continues to decrease, that will make OTM call options cheaper again. I am not recommending you buy those deep OTM short-term call options because chances are they will expire worthless. With that said, that kind of ape-strength-fueled OTM call buying is what fueled the first squeeze...and it can certainly happen again. Although I'm not betting on it.

• MMs hedge constantly throughout the day as delta/gamma change. The idea that options expiring ITM or OTM will lead to a gamma squeeze after hours is ridiculous because MMs are actively hedging into close. If your long call expires ITM, the MM is already long the 100 shares by market close. This is why gamma squeezes happen during market hours.
  • The exceptions are when ATM options expire with non-zero deltas at expiration. In those cases, there is stock tied to those options at expiration and that stock will most likely be unwound in afterhours. This is probably not what happened with GME.
• Gamma squeezes can go up or down. Many of you seem to think that gamma squeezes only go up, but this is just wrong. Squeezes follow the negative gamma (MMs have negative gamma when you buy an option). If there's a lot of deep OTM call buying, that sets up for an upwards gamma squeeze; if there's a lot of deep OTM PUT buying, that sets up for a downwards gamma squeeze.
  • Right now, GME put buying heavily outweighs calls so, if anything, we're setup to squeeze lower.
• When there is net option buying (be it puts or calls) that creates negative gamma (the MMs) which fuels volatility and exacerbates price movements.
• When there is net option SELLING, that creates positive gamma which suppresses volatility and favors mean reversion to the largest gamma strike.
  • I'm of the belief that positive gamma creates a lot of support for SPY, and I use it to guide my SPY positions. It's worked out well for me, so that's why I use it.
• Seriously, don't buy deep OTM short-term options. 99 times out of 100 you're throwing your money away (that's why the delta is basically 0).
• There is a lot more nuance to this, such as options expiration, IV, long/short positions, and other things that are too complicated to discuss in one post. I've tried to simplify things, and hopefully I didn't make any mistakes in the process. When you consider that MMs are short some options and long others, it makes things more complicated.

Quick aside - my history and positions:

About Cohen (and friends)

1. After his activist letter calling out the board and then 13D buy after the earnings dip rocketed the stock up from 12 -> 20, it was clear to everyone that RC was the reason GME’s stock was heading up. The GME board was afraid of a hostile takeover / losing their jobs. This agreement allowed Cohen and 2 others on the board as long as he didn’t attempt a hostile takeover.
2. Cohen wants it all. In the activist letter, he publicly said “no” to just one board seat. He then publicly bought more as soon as Sherman threatened a shelf offering to dilute him below 10%.

• Alan Attal - the previous COO and CMO of Chewy (2011 - 2018)
• Jim Grube - the previous CFO of Chewy (2015 - 2018)

Cohen is not an exec - he’s a founder with an all-in mentality

1. Cohen himself is an all-in person. Key quote:
   1. “When I find things I have a lot of conviction in, I go all-in*.”*
   2. Cohen is a founder that has gone through the successful creation of a startup. When you are startup founder, most of your NW is tied to equity in your company. You are trained to have skin in the game. You’re not allowed to think you have a safety net. You give up years of your life and bet everything because you have to believe in what you’re doing. Founders typically have 30-50% ownership of their company.
   3. “Cohen uses the word “conviction” a lot. He says it’s something he learned from his father, who ran a glassware importing business in Montreal where Cohen grew up. “He taught me how to block the noise from the masses,” says Cohen. “To have a point of view and have conviction and not waver.”
2. He only sold Chewy rather taking it to IPO because of his Dad’s health. He cut his entrepreneurial career short and he’s itching to get back in.
3. Cohen sold Chewy for $3.35B, with estimates stating he personally walked away with about $600M after taxes.
4. Cohen has a lot of capital to buy more. After selling Chewy, he went all-in on Apple & WFC, which as of June was up 40%.
   1. “ Cohen says his portfolio, when including dividends and a few other stock holdings, has returned more than 40% over the past 3 years, beating the market.”
   2. Aapl was his largest holding, and is up another 50% since June 5 when the Bloomberg article was published.
   3. Cohen lives in FL - with no income or capital gains for individuals, unlike other founders who live in CA which taxes all cap gains as ordinary income.
   4. I’m going to estimate his net worth (minus his GME holdings) is around $800M-$1B.
5. Cohen’s 9,001,000 (it’s over 9000! 🐲🏐) shares have thus far been purchased at something like an average of $12/share, for a total investment of around $110M.

What will lead to Cohen’s next purchase of GME

1. Prior to Q3 earnings, his purchases were signaling an intent to the board that he was serious about wanting to get involved. He also rubbed it in their faces that the stock price was largely appreciating because of him. From the activist letter:
   1. “We recognize that the Board may feel it is insulated from stockholder scrutiny after adding new directors this past spring and seeing a recent stock price uptick (which only came on the heels of RC Ventures filing its 13D)” (what a fucking burn).
2. If there was any doubt about RC’s impact on the stock price, it was put to rest after Q3’s earnings, where the current leadership’s hubris and threat of diluting RC led to a drop of almost 30%. RC then bought the dip, shoved it in their faces, and the market GME again rocketing GME to 20 in a massive post-earnings recovery. Message sent again - “The market wants me. Let me the fuck in.”
3. Now that Cohen and the Chewy folks are on the board, he’s going to angle for CEO. He’s not looking to advise GME. He wants to go all-in, to run GME. He’s holding the optionality of buying more based on the success of his attempt to take over GME through non-hostile means.

GME’s market cap potential

1. Cohen sees a $200BN+ total addressable market cap for gaming by 2023. For contrast, Chewy was playing in the pet food/supplies market, which has a total addressable market (TAM) of under $50BN annually. GME’s potential is at base 4x that of Chewy. This does not even account for the pc gaming hardware market, which is another $35BN+.
2. Chewy’s market cap is $44BN on $6BN of annual revenue.
3. Chewy’s Q3 quarterly income was up 45% YoY. While GME’s quarterly income was down YoY, its e-commerce revenue was up 257% trouncing Chewy’s growth rate.
4. GME’s Q4 early sales preview reported 300% E-commerce growth and annual run-rate of $5BN

1. GME’s physical business
2. its rev sharing partnership with MSFT
3. its 5x faster growth and 5x TAM

Potential Investors

1. Elon (Least likely, completely improbable, but cataclysmic event). Elon hates shorts. Elon, with TSLA, went through the pain that GME is going through. TSLA almost went bankrupt because shorts were pushing the price down so it was difficult to raise the cash they needed to survive. Sound familiar? Elon’s wealth swings more in a day than GME is worth in entirety. Elon could buy all the fucking float of GME with what he makes in 8 hours. One call from fellow entrepreneur and aspiring twitter-meme-god would absolutely wreck the game.
   1. If you are short gamestop, you are one meme purchase by the richest man in the world away from a fucking cataclysmic event. "Hey son, I heard you like games. So I bought you gamestop. All of it." 🚀
2. Buffett (More likely, still improbable). I’m actually amazed that while Buffett & co were lamenting that there are no interesting stocks to invest in and moving to cash, that they absolutely missed the boat on GME while it was at its lows. It’s a complete value play right up his alley (in a business he can understand). My only hypothesis here is that the market cap is too small and he could not make a meaningful investment. Once GME grows to a more respectable market cap ($10b+) I can see Buffett stepping in and making an investment.
3. Cohen’s connections. (Highly likely if Cohen is CEO). This is the big one. And I mean absolutely nail in the coffin re-pricing of GME for the foreseeable future. Go read this Harvard Business Review piece on Cohen specifically on how Cohen puts importance on raising money and the people that backed him.
   1. Look, I’ve started a startup before in the valley (unsuccessfully unfortunately). However, you don’t start a company without making a shit-ton of venture capitalist & angel investor connections. Cohen has stated that when pitching Chewy he was rejected by over 100 investors. I can absolutely-fucking-guarantee you that every single one of them remembers their mistake and would not miss the opportunity to invest in Cohen again. And don’t forget all of the investors who DID invest with Cohen and reaped the benefits with Chewy. While venture capitalists don’t generally make investments in public equities, this is a truly unique situation. Cohen is treating this like a rebirth, a new venture bootstrapped from GME’s bones. If VCs as a firm will not invest, you can bet your ass that those individuals will throw their personal money at Cohen. However this only happens if he’s CEO. As soon as he’s CEO, a single long weekend trip to the valley might mean 100+ investor meetings with the strategic pitch.
      1. My biggest fear here is that VCs/PE band to take the company private at some small multiple (2-3x) and then reap the benefits while Cohen turns the company around only to re-list it to us 5 years down the road at 30X the valuation.
   2. Thus far, it’s been us retail retards vs the wall street shorts. HFs shorting this thing have the advantage in both tactics and capital. However, if Silicon Valley money starts pouring money into this the game is over. You cannot believe the amount of money that gets thrown into startups with 90% of it burning up into thin air. $3B market cap? That’s nothing. Folks with Silicon Valley money & risk tolerance would have no problem betting on a serial entrepreneur making something amazing out of a company that already has a customer base, revenue, distribution - all in the same business (e-commerce) the entrepreneur already proved themselves in.
4. You, and every other retard that believes. Look, this was my point at the beginning. You need to think like a VC here. VCs are the ultimate YOLO autists making million dollar bets and not seeing a penny of it for years. They are the ultimate 💎✋🤚. You need to decide if you have conviction for the long term and then buy in. 💎✋🤚 doesn’t mean selling at $100. It doesn’t means selling at $200. It means not selling at all this year no matter the price, and at least until you learn for sure whether Cohen is the new CEO. It means believing so hard that you 20-100X your investment in 2 years when the market wakes up to the ridiculous mispricing.
   1. Remember that if Cohen is elected CEO he can (and likely will) buy more than a 20% stake in 2022.
   2. Remember Buffett’s actual quote: "The stock market is a device for transferring money from the impatient to the patient."

Overview of the logging market

• How are traffic levels trending on my website?
• Is my AWS instance still alive? How is the application performing?
• Are my Windows machines patched and up to date?
• Is there any unusual activity on my network?

• Compliance: Companies need to store immutable logs for a certain period of time as a form of record keeping.
• Security: Logs are reviewed during threat forensics after a cybersecurity breach. The security team needs to inspect their firewall/access logs to identify how and when they got breached. ie. who accessed this file and when?

The current players

1. Buy: Pay Splunk to help deploy in your datacentre. And then pay them professional service fees every year to help maintain and manage the software. And pay them based on the amount of data you send to them.
2. Build: Get a bunch of your developers to build a solution inhouse using an open source Elastic stack (ELK). They then have to actively manage the system themselves to keep it alive and manually scale it up and down accordingly.

Architecture matters

You can put 1000 mothers on the task of creating a baby, but it’ll still take 9 months.

Asymmetric risk and incredible upside

• FY2019: 53%
• FY2020: 50%
• FY2021E: 30% (COVID)
• FY2022 and beyond: ???

So why has the stock been floundering?

• Inability to acquire net new customers
• Competing against vendors with much larger scale
• A less than articulate CEO. Granted he came from a product background as opposed to a sales background, so we’ll cut him some slack. I originally thought he seemed a little burnt out but having watched his older videos, that’s just the way he is.

The bottom line

• Q4 growth performance – is the chart moving up and to the right?
• FY2022 guidance – how healthy is their pipeline looking?
• Lockup comes off – are VCs dumping the stock?

"WE ARE FUCKED!" scenarios:

• RC, despite what you can read around here, is not your actual daddy. He is a business man looking to make profit.

• RC is fucking rich and if he wanted, he could already retire.
• It would ruin his credibility.

• We learn through official paperwork that RC sold his shares, price reaches near 0 within minutes.

• Near zero chance this happens. But if its does, Price Target (PT) is very low.

• That was shorters play from the beginning.

• According to DD posted by people on WSB, GME books look good.
• New console cycle, stimulus money, post COVID optimism all point that GME should be afloat longer then we need them to.

• We learn through official paperwork that GME is in a very bad condition.

• Very low chance that this happens due to againsts. But if its does, Price Target (PT) is 0.

• They have written the rules of the game and honestly, they know much better how to play it then us.

• If they could do it they would probably have already done it instead of loosing almost a billion in options last Friday.

• Serious price drop on Tuesday despite short restrictions.
• Price falls in following days below $20 per share and refuses to come back up for a very long time.

• Non-zero chance this happens. It is possible. But IMO unlikely because I believe that if they could save their options they would have done it already. PT: uncertain but definitely below $20. $10-$15 if I had to guess.

Neutral scenarios:

• Institutions has already proven that they are committed to their shorts. And they will not admit defeat.
• Shorts have more money and patience.
• If shorts are replaced by new ones, they will not bleed (but that's unlikely).
• We believe, but a lot of us have paper hands and/or can't afford to keep cash frozen to wait this out.
• Hype will die down and with it our conviction.

• If the price settles above $30 or even better above $35, shorts will bleed money.
• If the price remains low ($30 or below), there may come other large investors for a long position after they realize that this is a good value investment. This would trigger good scenarios.

• Price volatility decreases over next week or two and settles probably somewhere between $25 and $35.

• Honestly I'm mostly afraid of this scenario. But at the same time it's not very likely that shorts are replaced. Then again, if nothing major happens relativly soon, this is still a likely scenario. PT: $25-$30 for months to come until one side wins.

• If the price settles above $30 or even better above $35, shorts will bleed money and will be covering their shorts.
• One should never underestimate autists.

• United retards with diamond hands? Retail investors are market makers? I want to believe that we have that power but lets keep it real.

• Price volatility decreases over next week or two and settles probably somewhere between $25 and $35. But the trend will become upward after that.

• Hard to say. I think some actually good scenarios are more likely then this one.

Good scenario:

• Shorts are already kind of fucked.
• Big investment firms have proven many times before that they are arrogant and they can be very wrong.
• GME is shorted into oblivion and unless it declares bankruptcy in next weeks or months they will HAVE to exit.
• Any good news will make this only more likely (like new investor reveals that they are getting involved for a long position).

• Like I said before, we don't exactly know what shorts could have up their sleeve.
• If shorts are replaced by new ones they will not be forced.

• Price jumps on Tuesday and continues the trend more slowly later even without short restrictions.

• It's likely and this is my bet. PT: very hard to say but could be anywhere between $60 and $200 or even way more in next weeks or months.

Mother of all Short Squeezes

• All of the "good scenarios" fors, but the good news is actually something big RC or GME reveals that sends shorts running for their life.

• RC signed a document that prohibits him from acquiring more then 20% shares and while float is low compared to shorts, it's not enough for MOASS.

• Price opens at $200 or $400 and only goes up. Sorry FOMO guys, the rocket missed the Moon is already past Jupiter.

• I and many others dream that RC drops a bomb before Tuesday, but I honestly give this maybe 10% chance of happening. PT: a random number between $420.69 and infinity.

Dear FOMO guys

My position:

1. The company's core business is under-valued
2. Vaping will see a resurgence as a less-harmful alternative to cigarettes
3. Altria is poised to win big if marijuana is federally legalized
4. Michael Burry's Scion Asset Management is heavily invested in $MO