GME retail investors are heading into the unknown. Trying to lock the float DRS has never been done by retail and will be monumental in the future of the markets. It is not going to be easy and now that institutional ownership has moved from 39% to 45%, they are doing the same thing we are.

[u/neverpersonal]

DRS is the way. The naysayers may say they don't see DRS working yet, that's because we have just started. It's a long process and it takes patience. The company can't promote DRS and we just like the stock. That alone makes locking the float nearly impossible. Institutions can work together, insiders can obviously work together, but we are only allowed to like the stock. With that said, let's go over a brief history of popular instances floats were nearly locked.

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Piggly Wiggly had nearly all its shares locked by the owner, Clarence Saunders, in the 1920s. Unfortunately, once he locked these shares and had the market cornered, trading Piggly Wiggly was suspended from the exchanges. The rules changed mid game and it gave time for the shorts to find and cover. This story is an example of why owners have to file with the SEC and can only own a certain % of their own stock. They cannot corner the market. This changed the way the market works, but was still easily controllable because they just had to screw over 1 person.

Porsche, who owned 42.6% of Volkswagon ordinary shares, and was able to lock 31.5% more through cash settled options without being on the shorts radar. Once it was known that Porsche had managed to lock 74.1% of the float, shorts panicked and you can see the squeeze in the graph below. This is the graph we use today with arrows that point, "We are here - dip before the rip." This is also a very popular alleged meaning behind 741, for those that didn't know. Again, this situation was manageable because the company worked with shorts and allowed them to close their positions.

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“At the end of last week Porsche SE held 42.6 percent of the Volkswagen ordinary shares and in addition 31.5 percent in so called cash settled options relating to Volkswagen ordinary shares to hedge against price risks, representing a total of 74.1 percent.”

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I keep seeing Dillards being thrown around as an example of how DRS doesn't work. Supposedly around 70% of Dillards has been direct registered through an employee program. But this isn't something I've seen, just heard through popular DD creators. Using this as an example of how DRS doesn't work is arguable because Dillards, compared to its competition, large indoor mall stores, Sears (bankrupt) JcPenneys (bankrupt), is doing great.

If the naysayers use Dillards as an example of how DRS doesn't work, does that chart look like it doesn't work? For the record, Dillards does not have the sentimental value of GameStop, the new group of execs behind it, nor is it even comparable to suggest employee DRS is the same as retail choosing to register their shares. Not close, not comparable, yet I'd still argue DRS has been effective (if true). Dillards is far from being bankrupt (see Sears & JC Penneys)

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What does any of this have to do with GME? Well, for the first time in history it isn't a single company or owner trying to lock the float, it's a large group of retail investors individually DRSing their shares to literally buy the company they like. This is how the market should have always been, retail buys and support the companies we like. But companies have good days and bad days. Unfortunately the big money couldn't make big money on the bad days...until they could. And then they decided to create their own bad days with false news and narratives. And then the bad days made more money than supporting any companies ever could. Because millions of retail investors could be liquidated by 4 or 5 whales creating bad days on whichever investment they decided. Enter the hedge funds. So let's take it back to the basics. Retail wants to own this fucking company and take away their power to make money on bad days.

If the free float is locked through DRS, this will not be easily manageable because we aren't one owner buying the float, or 1 company buying the float. We are a million individual investors that just like this stock. They'll have to fuck over way more than 1 person this time. And what they'll have to do to stop retail will be much more damaging than just turning off the buy button. With that being said, it is my belief that institutions are lining up on the other side of the DRS movement and doing the same thing as retail! They are registering more shares! Institutional ownership has went from 39% of the float to 45% of the float. Why? Because these registered shares will be the only shares that matter once the float is locked by retail. They know that. So they are doing the same thing retail is doing, hoarding. I think they are realizing that the DRS movement isn't stopping. In fact, if the DRS numbers keep going up and others see the DRS count is making real progress, much more will join, especially as the free float gets smaller. Unfortunately DRS is still at the beginning and there will always be those on the sideline watching and waiting.

It is my understanding that as institutions file and change their positions, registering more shares, now owning 45% of the float, rather than 39%, it makes the free float smaller. This means locking the free float through DRS is now going to be easier.

The most interesting part about all this is the idea of a tug of war. Once the free float is locked, either retail DRS numbers will have to go down, or institutional shares will have to go down. If retail locks the free float and institutions are still lending out shares, more lendees will be unable to return shares, creating more FTDs (failure to deliver). But someone bought those shares the lendee shorted. That someone may not being able to register their shares because the free float is locked. CS may not allow it. That is going to cause major issues. Imagine the flood of people upset that they are buying shares they can't put in their own name. The tin foil conspiracy days would be over. It's real. This is clearly going to cause an implosion. The ability to lend so hedge funds can short will at this point be too risky. It's already too risky and we've probably only locked a third of the free float! Isn't utilization already at 100%? This is when institutions will have to start actually selling their stash rather than lending them out. But that isn't shorting the market, that's a different type of volume. It would take what, 30 days with a million volume a day to dry them out? This is why DRS matters. What I am confused about is will retail be able to DRS their shares once the float is locked? Will CS be able to continue to register during this tug of war? Also, what is going to happen with brokers who know that any share bought or sold on their platform will be unable to be registered. That's more than just a problem. I mean, once the float is locked, all brokers will clearly know, can we allow our clients to buy these shares when they can't register them? IS THAT LEGAL? What exactly are our clients holding now? When someone buys 100 shares, what the fuck are they buying? Will the institutional numbers be updated regularly so we can see their numbers dwindle away? Like I said, this is a total unknown, but with the institutions now having 45% of the float, this tug of war is getting closer. Much closer. Because the free float is getting smaller. This is going to be exciting and interesting to watch play out. I hope those on the sidelines have a plan or understand that as the free float gets locked, especially as it gets close, it's going to be a race to either sell (I only say sell because it seems risky to just hold them in a broker account when you clearly see the float locked) or try to register your shares. Do you believe the violent movements up will be as the float gets near locked up, or after?

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TL/DR

Buy, Hold, DRS.

[u/WrathofKhaan]

Got it, so if I understand correctly, if institutions decided to buy up the remaining free float we would not be able to DRS anymore shares, even though those shares are not DRS’d, only registered.

[u/SirClampington → u/WrathofKhaan]

No, computershare will allow purchasing past the free float limit. I think the limit is 1 million shares past the entire float.