Over the past few months, GameStop has seen consistent upward movement, and now we’re noticing a new trend: massive institutional buying from some of the biggest players in the game. Is this the start of a slow squeeze? Or is there something larger at play here?

Major institutions like BlackRock, Vanguard, and even Citadel Advisors are making substantial additions to their GameStop positions. What's strange is that some of these same entities might also be tied to the short side of the trade. So, why are they suddenly loading up on long positions?

Here’s what we know so far:

Institutional Activity Highlights

• BlackRock, Inc.: Added 9,642,309 shares (+42.7%) in Q3 2024.
• Vanguard Group Inc.: Added 7,409,452 shares (+24.9%) in Q3 2024.
• Geode Capital Management, LLC: Added 1,852,088 shares (+41.8%) in Q3 2024.
• Citadel Advisors LLC: Added 1,830,940 shares (+2334.2%) in Q2 2024.
• Jane Street Group, LLC: Added 1,752,231 shares (+1519.0%) in Q2 2024.
• Dimensional Fund Advisors LP: Added 883,572 shares (+439.5%) in Q3 2024.
• Northern Trust Corp: Added 679,423 shares (+37.1%) in Q3 2024.

https://preview.redd.it/c9y2zjfoni3e1.jpg?width=1164&format=pjpg&auto=webp&s=b3a6ca707c3dd463b3eb950124ca1dc33777680a

Ownership Breakdown

Total shares outstanding: 446.1 million.

Institutional shares held: 125.374 million.

Insider shares: 36.23 million.

Remaining shares = 446.1M - 125.374M - 36.23M = 284.496 million.

Retail shares directly registered is supposedly 50% of available shares to retail (25% total)

Directly registered = ~75 million.

The actual number of directly registered shares is likely much higher than reported. For a long time, the figure has remained stagnant in the 70-million range, specifically at 75.4 million. This is largely due to how GameStop has been required to calculate it. About two years ago, they were instructed to change their method for reporting DRS numbers. Instead of simply obtaining the accurate total directly from Computershare, GameStop has been forced to calculate it by deducting other values from the float. This approach produces the 75.4 million figure but doesn’t account for anything beyond that threshold. It’s similar to what happens when voting numbers exceed 100%—anything extra is ignored. Some speculate that the real number of directly registered shares could exceed 100 million.

What Does This Mean for Retail?

We’ve been here before, but this time it feels different. Institutions aren’t just holding steady—they’re significantly increasing their positions. What makes this especially intriguing is the involvement of Citadel Advisors, a firm that many believe has the most exposure to short positions. If the float is locked up through DRS, insider holdings, and institutional ownership, we may be entering a phase where the pressure on shorts could become unsustainable.

Why Are They Buying?

Here are some possible explanations:

1. Hedging Short Exposure: Institutions tied to short positions could be using long positions to protect themselves against potential losses. By acquiring shares, they reduce risk while maintaining influence over the price.
2. Slow Squeeze or Price Control: Is this the beginning of a slow squeeze? Or are these purchases designed to maintain control and prevent the price from skyrocketing too quickly?
3. Confidence in Long-Term Growth: GameStop has a solid cash reserve and is undergoing a transformation. Institutions might be betting on future profitability and growth.

Citadel’s Role – The Biggest Mystery

Citadel Advisors’ addition of 1.8M shares is one of the most curious aspects of this trend. If Citadel has significant exposure to naked shorts or synthetic positions, why would they need to buy shares?

Possible reasons:

• Hedging their exposure: Preparing for a worst-case scenario where shorts are forced to close.
• Buying time: Accumulating shares to avoid catastrophic losses in the short term.

Heck, this could be the reason why they all have been going in. Every man for themselves or simply trying to control the narrative.

Where are Citadels shorts?
One prevailing theory is that the hundreds of millions of shorted shares from 2021 may not have disappeared but were instead buried through a complex web of rehypothecation, swaps, and synthetic positions that make them almost impossible to trace or trigger.

By routing these obligations through opaque financial instruments like total return swaps or securities lending programs, institutions could have spread the liability across multiple entities, effectively diluting the risk. This creates a scenario where no single entity holds the full exposure, and the synthetic positions remain hidden in shadowy, unregulated parts of the market. Additionally, market makers may have exploited loopholes in regulations, such as exemptions for creating "market liquidity," to flood the system with phantom shares. These tactics could explain why short interest appears manageable on the surface, even though the underlying liabilities might still exist.

This strategy doesn’t eliminate the shorts—it compartmentalizes them in ways that are difficult to trigger under normal market conditions, making a forced short squeeze less likely unless there’s an external catalyst like a massive corporate action, a recall, or a regulatory crackdown.

Final Thoughts

This institutional buying frenzy feels calculated. It’s worth asking: Are these moves a signal of confidence in GameStop, or are they part of a larger strategy to manage risk and prevent MOASS?

With earnings around the corner, who knows.

TLDR: GameStop's stock has been steadily climbing, and now major institutions like BlackRock, Vanguard, and even Citadel Advisors are piling into the stock with massive share purchases.

The big question: Why are these institutions, including those potentially tied to short positions, loading up? Possible reasons include hedging short exposure, preparing for a slow squeeze, or betting on GameStop’s long-term transformation. Citadel’s move is especially puzzling, as it could signal an effort to protect against catastrophic losses or maintain control over the price.

Is this the start of a slow squeeze, a calculated strategy to manage risk, or both? With earnings and rumors of corporate action looming, things are heating up. Let’s break it down—bullish signal or more Wall Street chess?