BBBY… Buy Shares if You Want Tendies – Serious DD via /r/wallstreetbets #stocks #wallstreetbets #investing


BBBY… Buy Shares if You Want Tendies – Serious DD

Wow… Last couple of days were a doozy! Makes you really question all your assumptions. So here is some deep DD to help understand the situation here and how easily this can soar. Stay away if your only language is Ape. This is for those who want to think this through.

A review of various 13 filings with the SEC indicates there are about 54 million shares held by large shareholders/institutions. Beginning of this week that number was about 59 million shares. Jack Freeman (college boy story) sold 5 million shares, hence the decline.

The 4 largest holders of those 54 million shares are Vanguard, Fidelity, Blackrock, and Ryan Cohen totaling 50.5 million shares. The rest are held by Morgan Stanley, DE Shaw, and Contrarius. Now it is important to realize the shares held by Vanguard, Fidelity and Blackrock are likely in large funds (e.g. Fidelity Low Priced-Stock Fund has 10.4 million shares, worth at closing about $200 million, in a Fund with about $26 billion in AUM) that generally don't trade their stocks and it is reasonable to expect those shares are effectively locked up. The shares Ryan Cohen owns (about 9.5 million) are per some post on wsb locked up till sometime in Sep. What is left is a few million in shares that can possibly be dumped. In any case, given the ability of the market to cover Freeman's five million shares and push the price up, I would not worry about potentially a few million in shares being sold by tutes.

BBBY had about 80 million shares outstanding, which if we deduct the 54 million shares held by large holders, gets you to about 26 million shares, which would in theory represent the traded float.

However… You have to add the shares shorted to that number. Per one estimate the short interest is up to 37 million, meaning the traded float is about 63 million. FYI, shorting is apparently increasing difficult to do here so expect this factor increasing supply to stop soon (oh, and if a short squeeze… the shares shorted might be way too high here to easily cover).

Open interest in options in the $20 and under range probably represents 30 million or so in shares. If 50% of those options are hedged via other options, then the other 50% would be hedged perhaps with shares, so maybe 15 million shares needed for hedging. So deduct that from the 63 million and you get 48 million for the float that can be traded. Obviously, just guessing here.

wsb has 12.4 million followers. Now I have no idea the actual number of people lurking here nor what percent are in this BBBY thing, however, perhaps we are quickly approaching a few million in people interested in getting in on BBBY. Say we estimate 2.5 million people now.

Well… if each of those 2.5 million people were to buy 20 shares each at a cost of about $400, it would ensure retail owns every share that can feasibly be traded. Reality is that many of those 2.5 million people don't have $400, but many others do. So on average we need to see these levels of ownership. In any case, once this happens (and I believe we are well on the way there) it will become very difficult to push the price down. As the population interested in BBBY grows to 10 million, suddenly everyone owning on average 5 shares is enough, however the cost and value may be up by then.

In any case, I think we have been seeing a move to an increasing number of small investors looking for a big movement upwards (e.g. how else is this up while investors like Freeman sold?). Yes, we might have a dump here and there, but so long as awareness is growing and more are piling on board the dump will stop and all the people that panic sell will buy back in driving the price back up.

Basically, the key to seeing this run is to buy shares. Not just options. It is evident that the more people buy shares the sooner a gamma/short squeeze will be triggered, helping propel the stock to those levels we hope to see.

TL,DR… Buy Shares and HODL them. If YOU don't, then NO ONE else will. So important we each do our part and participate in buying some shares.

Position: I have 1,000 shares.

Submitted August 18, 2022 at 09:41AM by aka0007
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