So, will bankruptcy stop wage garnishments using your service after I file DIY? YES. According to Bankrate, "The automatic stay is a court order that stops most creditors from continued debt collection activities—wage garnishment included." So what are you waiting for, effective help for more than 13 years now at Uncontested Documents in Wichita.
Bankruptcy Chapter 7 $200 Excludes Filing Fees
https://preview.redd.it/mdll6apeju0d1.jpg?width=2212&format=pjpg&auto=webp&s=80a768077a1c028c3c3080219b3a5c466a7488a8
UNCONTESTED DOCUMENTS 801 E. Douglas, 2nd Fl., in Wichita, KS (316) 312-4748 Call or Text [uncontesteddocuments@gmail.com](mailto:uncontesteddocuments@gmail.com) https://www.uncontesteddocuments.com
Since 2011, Thank You Grateful To Be Of Service

https://preview.redd.it/sjsb8z54tp0d1.jpg?width=1920&format=pjpg&auto=webp&s=0932ceeaafe8f62865625bfe4cd1c0803f33742d
This post will begin with a preface: Blue Archive's Kivotos is just a sugar-coated, moe-induced version of Project Moon's City... for the most parts. If you take the characters of BA and make them City residents, it won't make too much difference (aside from the gun restriction). And so, this series would just be me assigning various City organizations to be suited for the BA casts and clubs. Today's part is rather easy because Fixers are the most common and well-known group in PM-verse
1. General Student Council Hana Association Pretty self-explanatory, since they fit the role of an overseer towards the many subsidiaries (Students for BA's case, and Fixers for PM's). Some may argue that GSC is more like the Head, but I disagree since at the end of the day, GSC still has the willingness to uphold order unlike whatever the Head is doing for their City.
2. KSPD Zwei Association This one is also a no-brainer, because both of them serve as the peacekeepers and enforcers of the law.
3. Knowledge Liberation Front Tres Association This is more of an odd choice since not much details are known about Tres. However, we do know that they are responsible for researching and grading Workshop products, so it safe to say that the Knowledge Liberation Front can serve that purpose + imposing their own agenda (as in, trying to get as much Workshop as possible to be legal since they believe that Workshops shouldn't be too limited by the rules). Side note: I also want them to be the Technological Liberation Alliance from Limbus, but... that spot is reserved for a certain group of terrorists.
4. Ninjutsu Research Club Shi Association Now, hear me out: the original purpose of ninjas was supposed to conduct discreet missions that included assassinations, right? And since Shi is all about killing people from the shadows, it's not too far fetched to connect two-and-two together, but instead of using the normal standardized Shi weaponry, the Ninjutsu Club members would carry out their assassinations using their self-developed techniques.
5. After School Sweets Cinq Association The original idea for this is courtesy of @/xiazhenqwq on Twitter, but I really like their idea of Kazusa and Reisa being duelist Fixers, especially with Reisa's personality.
6. Black Tortoise Promenade Liu Association Not much can be said about this one, other than them being an Association that takes aggressive approaches in their missions (or direct confrontations), and them having some connection with food. Although, if we just want to see from the “funny Burn status” perspective, I guess the Hot Spring Department can be included here.
7. Abydos Foreclosure Task Force Seven Association I’m a little biased about this one since Abydos is my favorite school and Seven is also my favorite group in Limbus. But still, the idea of Seven is all about gathering intel and reconnaissance; two of the things we see the Foreclosure Team often do (minus paying their debts and, y’know… robbing a bank). Besides, a Section 6 Office with only five members in the edge of the district with no funding whatsoever from the higher sections makes for a good story.
8. Highlander Devyat Association Just like Tres, not much details are known about Devyat aside from its role of managing transportation and delivery, so we can move on from here.
9. Sisterhood Dieci Association This one is very easy because, come on, Dieci’s aesthetic screams Catholic. Additional points to the fact that the Sisterhood has access to an antique library and holds records of Trinity’s oldest history. Also… the mental image of Mari punching people with her bare hand is just hilarious.
10. Justice Task Force Öufi Association Being the upholder of justice, the JTC job includes maintaining a high-degree of order and handling the breach of said order, which is similar to Oufi’s job, but the latter is limited to just affairs related to contracts and deal making.
Also, I did not include Eight Association here because we literally don’t have a single shed of information other than the name.
BONUS: INDEPENDENT OFFICES
Problem Solver 68 I don’t care what anyone else says, I believe PS68 should have their own Fixer Office; just a bunch of ragtag Fixers from various backgrounds under the leadership of their (questionably) competent leader and are always in a state of debt + will do anything just to get money. Hell, I even already have an idea for a fanfic about them!
Well, that took longer than expected. Feel free to share your own opinions about this (Yes, I’m talking to you Project Moon sleeper agents)

From the prior DD in this series [1], we know that ComputerShare can “give” the DTC registered DSPP shares to hold onto for operational efficiency which are then “given back” as shares beneficially owned “for the benefit of” (“FBO”) DSPP Plan Participants at ComputerShare, as illustrated in this diagram:
From The Prerequisite DD
It’s time to explore what “operational efficiency” benefits may be gained by DSPP shares going around this roundabout. At first glance, shares are basically just going in a big circle from DSPP Plan Participants with registered ownership DSPP shares at ComputerShare heading to the DTC, who hands shares to ComputerShare’s broker who maintains those shares for the benefit of ComputerShare who holds those shares for the benefit of Plan Participants. While I think it’s unlikely that shares just go around in a big fat circle for no reason, I do remember people getting onto flights to literally go nowhere a few years ago [CNN, NYT]; so maybe these operational efficiency shares simply miss hanging out at the DTC?
Let’s look more closely… While title is held by a registered DSPP Plan Participant, ComputerShare is giving the DTC possession [1] of registered DSPP shares to the DTC to hold for operational efficiency which then ultimately end back in the possession of ComputerShare’s broker (who isn’t lending out shares) for the benefit of ComputerShare for the benefit of Plan Participants. If we treat the DTC’s operations as a big black box, we see registered shares going into the DTC black box and beneficially owned shares coming out of the black box to ComputerShare for Plan Participants.
DTCC Black Box: Inputs vs Outputs
Investopedia says that shareholders have rights, with a list of 6 main rights including:

1. Voting power on major issues.
2. Ownership in a portion of the company.
3. The right to transfer ownership.
4. Entitlement to dividends.
5. Opportunity to inspect corporate books and records.
6. The right to sue for wrongful acts.

By contrast, beneficial owners only need to have or share 2 of those rights (bolded) according to the definition of beneficial owner in Rule 13d-3: the power to vote and the power to dispose of the security (e.g., sell).

§ 240.13d-3 Determination of beneficial owner.
(a) For the purposes of sections 13(d) and 13(g) of the Act a beneficial owner of a security includes any person who, directly or indirectly, through any contract, arrangement, understanding, relationship, or otherwise has or shares:
(1) Voting power which includes the power to vote, or to direct the voting of, such security; and/or,
(2) Investment power which includes the power to dispose, or to direct the disposition of, such security.

ComputerShare basically confirms this list (except for the right to sue as that’s probably not one their issuer customers would emphasize) and adds that beneficially held shares may be lent by brokers generally (but not by ComputerShare’s broker).
Registered Shareholder Rights vs Beneficial Owner Rights
Maybe you’ve had different experiences from me, but I’ve never known Wall St to deliver more than the bare minimum they’re contractually obligated to. Which means the DTC black box is very likely watering down shareholder rights from the 6 that go in down to the 2 which come out. (And yet, we’re supposed to believe that all shares are equal. 🙄)
Dividends (#4 on the list) [2] may be the clearest example of a watered down shareholder right. Registered shareholders have the right “to directly receive share dividends” [CS FAQ] which means if a company (e.g., GameStop or OverStock) issues a dividend, registered shareholders have the right to directly receive the dividend as issued. If the company issues a crypto dividend (as OverStock tried to do), registered shareholders have the right to directly receive the issued crypto dividend. Beneficial shareholders would get an issued dividend, if available, or a cash equivalent if not. Historically, stock and other dividends to beneficial shareholders could easily be delivered as a cash equivalent, a watered down form. Crypto dividends don’t scale well with shorts (both naked and legal via, for example, share lending and borrowing) because crypto tokens are unique which makes it abundantly clear why a crypto dividend was nixed for a heavily shorted idiosyncratic stock like GameStop; especially given GameStop’s particularly active shareholders.
Ownership (#2 on the list) may be the second clearest example of a watered down shareholder right as more security interests to shares exist in the DTC’s beneficial ownership system than there are shares; with the SEC saying beneficial shares get a pro rata interest in the securities of that issue held by DTC. [See End Game Part Deux: Problems at the DTCC plus The Bigger Picture, particularly the section “The Pie Is Shrinking: Get Out (And DRS) While You Can”]
Voting (#1 on the list) is also an example watered down shareholder right; this one having a long history on this sub with, for example, BroadRidge tossing 7B votes and bragging about it. (Beneficial owners only need to get shared voting rights per Rule 13d-3 above so those 7B “shared” votes just lost out to who they shared with.) Unlike other beneficially held shares, voting rights for DSPP shares are not watered down as ComputerShare sends registered holders their voting forms.

Operational Efficiency Shares, Whatcha Doing In There?

A big black box is a pretty good description of the DTC which does not want us to know the ins and outs of what’s going on. Black holes are a pretty good example of a big black box and, most importantly, we know a lot about black holes even though they can’t be directly observed. Just as we learned about black holes without direct observation, we can similarly learn a lot about the Operational Efficiency shares even though we can’t directly observe them in the DTC habitat.
Even though we can’t look inside the DTC’s big black box, it turns out we don’t really have to in order to identify some benefits from these operational efficiency shares taking their roundabout trip to nowhere.
Locates A few commenters have suggested that OE shares could be used for locates so I’ll address this first. Possible, yes. But I don’t view this as the most interesting use for OE shares. Brokers are supposed to “locate” securities available for borrowing before short selling. [Wikipedia)] Basically, before selling short a broker is supposed to find a source to borrow. The “locate” requirement does NOT require the security to be borrowed before short selling which can result in a legal naked short.
You may be wondering why I don’t view “locates” as particularly interesting for OE shares if short sellers need to locate shares to borrow before shorting. Well, market makers are also exempt from this requirement as long as they’re market making. 🙄 On top of the market maker exemption, remember House Of Cards? In House Of Cards 3 [SuperStonk], we learned about the now 🤦‍♂️ hilarious F**3 key **- yeah, the one on a keyboard. Brokers like Goldman found the locate requirement simply too much work so they would press the F3 key and their system would auto-approve the locate requirement based only on the number of shares available to borrow at the beginning of the day; regardless of whether those shares were still available to borrow or not.
House Of Cards 3
Meaning as long as there were some shares available to borrow at the beginning of the day for their share copying system, brokers could just smash the F3 key to make as many copies of shares as they need. Even if only 1 share was available to borrow at the beginning of the day, a broker could simply smash the F3 key 100 times to approve the locate requirement for 100 shares.
So while OE shares could be used for locates, they wouldn’t need many shares each day to make an unlimited number of copies - even just 1 is enough.
Lending shares on the other hand…
Rehypothecation Rehypothecation is the reuse of customer collateral for lending. Per a 2010 IMF Working Paper, The (sizable) Role of Rehypothecation in the Shadow Banking System,

Rehypothecation occurs when the collateral posted by a prime brokerage client (e.g., hedge fund) to its prime broker is used as collateral also by the prime broker for its own purposes.

This IMF paper defined a “churning factor” to measure how many times an asset may be reused; and then estimated a churning factor of 4 noting that it could be higher because international banks (e.g., HSBC and Nomura) were not sampled. This IMF paper found a single asset may be lent and borrowed 4 times, or more; an average which could be higher globally.
https://preview.redd.it/ymr3j03zri0d1.png?width=795&format=png&auto=webp&s=1555314cefd520658a4f78dc4745867063e3bf34
Churn Factor Could Be Higher Globally
How much higher? We may have seen a churn factor as high as 10 for a less idiosyncratic meme stock per my prior post, Estimating Excess GME Share Liquidity From Borrow Data & Churn Factor. Presumably, the idiosyncratic meme stock would have a higher churn factor (but not that important for this post).
More recently (2018), the Federal Reserve published this Fed Note on ​​The Ins and Outs of Collateral Re-use studying how often collateral is reused (i.e., rehypothecated) for Treasury & non-Treasury securities [3] with a beautiful figure illustrating how “for any given moment in time, one security can be attributed to multiple financial transactions” where a share could be posted multiple times through Security Financing Transactions (SFTs) and sold short. [4] Sounds familiar, right?
https://preview.redd.it/zsztmji4si0d1.png?width=1530&format=png&auto=webp&s=f222dfe50929f668af8f8f0b39514a7d862db9c9
Figure 6c of this Fed Note shows a Collateral Multiplier over time illustrating how “PDs [Primary Dealers] currently re-use about three times as many securities as they own for non-Treasury collateral and seven times as many securities as they own for U.S. Treasury securities”.
AKA \"Money Multiplier\"
The Fed Note describes their Collateral Multiplier as a “money multiplier” (Seriously, I couldn’t have made this up in a million years.),

In a sense, our Collateral Multiplier is akin to a "money multiplier," as it compares private liabilities created by a firm with the amount of specific assets held to create those liabilities. [​​The Ins and Outs of Collateral Re-use]

And, of course, the Collateral Multiplier aka “money multiplier” ratio goes up when there’s less collateral available and down when there’s more collateral available. (Can I get one of these multipliers?)

Intuitively, we expect the ratio to increase when collateral is scarce and to decrease when collateral is more abundant.

Which means Primary Dealers [Wikipedia has a list of familiar names including Deutsche Bank, JP Morgan, Morgan Stanley, Nomura, BofA, Citigroup, TD, UBS, and Wells Fargo; amongst others] can simply kick securities around a few extra times (e.g., with SFTs and short sells) to effectively multiply the amount of money and/or collateral they have any time they need it. (Within limits, I hope…)
Thus, rehypothecation is a very interesting use of Operational Efficiency shares from ComputerShare as various primary dealers can simply “multiply” the number of shares they have – a concept that we’re already quite familiar with. As rehypothecation, short sells, and securities financing transactions are all perfectly legal, rehypothecating more GameStop shares provided to the DTC via operational efficiency satisfies Ground Rule #2 [defined in (1/n) in this series],

1. All parties involved are all generally attempting to operate within the bounds of the laws and regulations wherever possible. (I know we often scream “crime”, but why break a law when money can simply [re]write laws to make activities legal. Regulatory failure is the reason why something that should be criminal, isn’t. And regulatory failure happens when armies of lawyers are paid to create and exploit loopholes so that actions which should be criminal, are instead legal.)

We can update our conceptual model to include rehypothecation to more clearly illustrate how Operational Efficiency shares held in the DTC can be rehypothecated (e.g., with SFTs and short sells) until a watered down share is delivered to ComputerShare’s broker to hold FBO ComputerShare, who holds the watered down share FBO DSPP Plan Participants.
https://preview.redd.it/bt3gnx99si0d1.png?width=4764&format=png&auto=webp&s=7b0b72b935f740e8a3036f88e1a4e1dfb57dd46c
You might notice from this illustration that ComputerShare has been telling the truth satisfying Ground Rule #1 [defined in (1/n) in this series]. Neither ComputerShare’s nor their broker lend or need to lend shares. All the rehypothecation happens “upstream” amongst other DTCC and NSCC Participants until shares are finally delivered to ComputerShare’s broker at the end of the “Churn Chain”. ComputerShare has made no representations about what the DTC can or can not do with the shares in their possession. And, realistically, ComputerShare is in no position to make any representations about what happens within the DTCC system – ComputerShare is only responsible for themselves and, to some extent, their broker.
The Fed Note and IMF paper found assets may be churned and reused 3-4 times (overall market average) which means the end of the chain is typically around D3 or D4. (If my prior DD estimates are correct, there were signs a less idiosyncratic meme stock may be churned up to 10 times ending the chain at D10 which suggests a potentially longer chain for GME, the idiosyncratic meme stock.) If there is no collateral reuse for an asset, the chain would have zero length meaning Operational Efficiency shares go straight from the DTC directly to ComputerShare’s broker. (Programmers almost certainly understand zero length chains very well – go find one if you need an explanation.)
GameStop is idiosyncratic, thus atypical. Per the IMF paper, collateral reuse increases when collateral is scarce and decreases when collateral is abundant (quoted above). If we consider GameStop investors have been direct registering shares (i.e., DRS) and registering shares (e.g., DSPP) thereby removing title and/or possession of shares from the DTC/DTCC/Cede & Co, then GameStop share availability has been becoming more scarce and the “Churn Chain” for GME should be longer than average representing a higher collateral multiplier and churn value.
While we may not know the exact length of the Churn Chain for GameStop shares, we can pretty well surmise that it’s not a zero length Churn Chain where there is no collateral reuse based simply on scarcity. After all, a shortage of available shares is, by definition, required for any short squeeze (including MOASS). Requests by brokers to enable Share Lending [5] is another example indicator that GameStop shares are scarce.
In addition, according to Investopedia [6], “Banks, brokers, or other financial institutions may navigate a liquidity crunch and access capital by rehypothecating client funds” and we’ve seen indicators showing us banks are in deep trouble:

• SEC FTD-ing FTDs Because A Clearing House 🪦 and Big Banks Bankrupting Soon
• Banks On The Brink Of Bankruptcy since March 2023
• Fed & FDIC 🦵🥫 can't hide unrealized losses
• Bank Term Funding Program: The Not-A-Bailout Can Kicking Bailout

The downside to rehypothecation is the higher leverage increases risks of default and a single collapse can start a chain reaction knocking down others like dominos.

There are also leverage considerations that increase that risk of default. Overleveraged investments often face covenants; when specific conditions are met, trading accounts may receive a margin call or face debt default. As a row of dominos fall after a single collapse, a single margin call may cause other debts to fail their account maintenance requirements, setting off a chain reaction that places the institution at higher risk of overall default. [6]

This risk for rehypothecation sounds exactly like what the Options Clearing Corporation was complaining about to the SEC when the ​​OCC Proposed Reducing Margin Requirements To Prevent A Cascade of Clearing Member Failures [SuperStonk] early 2024. If the OCC can eliminate margin calls, then no dominos get knocked down. (Thankfully, apes have done a phenomenal job in convincing the SEC that this OCC proposal is a very bad idea. Support the SEC’s rejection of this as Simians Smash SEC Rule Proposal To Reduce Margin Requirements To Prevent A Cascade of Clearing Member Failures!)
Most importantly, it may be tough to regain possession of an asset when someone in the rehypothecation chain defaults. Remember from the prior DD the expression about possession: Possession is nine-tenths of the law.

Clients must be aware of rehypothecation as it is technically their own assets that have been pledged for someone else's debt. This creates complicated creditor issues where an investors shares may longer be in their possession due to their custodian's default. [6]

We know assets are rehypothecated 3-4 times on average, GameStop shares are scarce, banks are in trouble, stock loan volume is skyhigh, and the risks of rehypothecation are real. So it’s pretty clear that rehypothecation is happening generally with pretty darn good reason to expect GameStop’s Churn Chain is at least of non-zero length (i.e., GameStop stock is being rehypothecated).

Breaking The Chains

While some may like chains and being tied up, I’m not one of those apes. Especially as a Churn Chain waters down my shareholder rights and may make regaining possession of DSPP stock difficult in the event of a cascade of defaults, as warned by the OCC. (If you like chains, feel free to skip this section.)
As it turns out, we don’t need to know exactly how long the Churn Chain is for GameStop stock. Simply knowing a Churn Chain exists with non-zero length means there is a chain. Where there is a chain, it’s possible to break the chain. (Even if you don’t know how much health) your enemy has in a game, you still try to take your enemy out. Right?)
A churn chain that starts from ComputerShare holding DSPP shares in DTC for operational efficiency can easily be broken as “[a]n investor can, at any time, withdraw all or part of their shares in DSPP book-entry form and have them added to their DRS holding”. [ComputerShare] See also [7]. Quite possibly one of the easiest chains in the world to break as the Churn Chain is weak to DRS. Simply DRS the DSPP shares to take away the head of the chain and the rest of the chain falls apart. (And, DRS-ing "street name" shares cuts chains into pieces too!)
One side effect of breaking a Churn Chain is that all shares attributed to transactions in a broken chain (e.g., SFTs and short sells) need to be reallocated to other chains, effectively making other chains longer and increasing the risks from a default.
Analogy: Think of the shares as a deck of cards. If you deal 52 cards to 4 players (A, B, C and D), each player gets 13 cards. Each stack of 13 cards is basically a Churn Chain. But if you take out a stack by removing the bottom card from A and distribute the remaining 12 cards from A to B, C and D then B, C and D each now have 17 cards. If at any given time a card can cause a player to lose the game, it's better to have fewer cards than more. And, the players who get out early won't lose.
Any party in the Churn Chain who defaults will make it hard for the original owner to regain possession. Longer chains include more transactions and more parties so there’s more risk of default on longer chains than shorter chains. Thus we see another vicious cycle setup where incentives are aligned such that DSPP and beneficial shareholders may want to avoid the impending default and rehypothecation risk from their shares being held in DTC. In order to avoid the impending default and rehypothecation risks, shareholders are incentivized to Directly Register shares to ensure having both title and possession. (Shares held in “street name” have little or no protection from rehypothecation risk and simply registering shares in DSPP doesn’t guarantee possession [1].) As with the other vicious cycle, any remaining shareholders in DTC share a shrinking pie of diluted ownership so it is in their best interest to get out and DRS; thereby shrinking the diluted ownership pie even more which is more reason for remaining shareholders to get out. These vicious cycles will eventually leave few, if any, remaining shares at the DTC for beneficial shareholders. Nobody knows what will happen if this ♾️🏊 happens.

Footnotes

[1] If you haven’t already, please read the prerequisite DD in this WalkThrough Series to understand how ownership of property is separated into two concepts: title and possession. [See, e.g., StackExchange] Understanding the differences between title and possession are particularly important here where it’s worth being extra careful identifying how an entity is in control of an asset.

1. DSPP is technically different from DRS [WalkThrough] (1/n)
2. Definitely DIFFERENT "DRS Counts" [WalkThrough] (2/n)

[2] Dividends have been heavily discussed on SuperStonk with many DD posts, including for OverStock and the precedent OverStock set which would have allowed GameStop to issue their own crypto dividend, possibly as an NFT.
[3] Footnote 16 of the Fed Note itemizes various classes of non-Treasury collateral which includes equity which, per Investopedia, is a synonym for stocks.
[4] While short selling is pretty well known, Security Financing Transactions (SFTs) may be more obscure despite discussion of them in the past so here’s some historical SuperStonk links for you (where you may notice some well known OG DD apes):

• Visualization of how SFT trades could prevent shorts and/or naked shorts from becoming reported FTDs per DTC-2021-010 filing
• SEC Comment Against Proposed Rule NSCC-2021-10 because SFTs Will Be Used To Obscure Abusive Short Selling
• How market makers, broker dealers and the DTCC game the markets: Why lending and short interest data to evaluate the true number of shorts is plain useless: Revisit SFT clearing to avoid Fail to Deliver, Reg-Sho, Forced-Buy ins and ALD altogether
• Let's talk RRP, SFTs and DOs
• DTC-2021-014 Settlement for SFT Services Risk Control Management

[5] Simply search SuperStonk for share lending. Don’t make me Google That For You.
[6] https://www.investopedia.com/ REMOVE_FOR_AUTOMOD terms/r REMOVE_FOR_AUTOMOD /rehypothecation.asp
[7] Withdrawing whole DSPP shares into DRS seems to make a lot of sense as doing so guarantees possession. Selling fractionals, less so. If you intend to keep buying, I would think adding to the fractionals to later withdraw whole shares makes more sense. As for the concern about fractionals tainting the whole account, I’ll cover that in another post. For now, you do you.

Good evening Clover Health investors
As the markets are now closed, and after hours markets are closed, I thought I would take some time to discuss some of the discussions that have occurred throughout the day. I would like to assure all of you that what GME and AMC experienced is definitely a meme rally, but what Clover has experienced is most definitely not. For Clover, it is a reversal to the actual bankruptcy peg of 1:1, which is an astonishing improvement and tells you the power of maniac retail short sellers. I will explain below, but first, our disclaimers:
We strongly recommend against investing into Clover Health on the basis of a meme rally.
*** Both RainyFriedTofu and Moocao123 has positions in Clover Health. The information provided is not meant as financial advice, please be advised of the potential bias and decide whether the information provided is within your risk consideration. **
*** This is not financial advice, nor is there any financial advice within. Shout-out to the AMC/GME apes for having me to write this ***
*** Please do not utilize this content without author authorization ***
Clover Health - stock price reflected for 05/14/24
https://preview.redd.it/kzfc3tos4i0d1.png?width=1709&format=png&auto=webp&s=9c638191da51282eae80784e72312fea1e72e621
I have previously already released this chart within my Clover health DD, I have included now an updated price per share, and highlighted the important section in RED. As you can see we are finally at exactly market cap 1.13 to cash on hand ratio, or in another way of saying it - we are priced slightly better than bankruptcy, similar to Dec 31 2023. If you instead listened to someone else/another subreddit, you would have thought we had a meme rally. We most assuredly did not. Let me show you what the meme rally did to AMC and GME. I have constructed the following Excel, but since they are not my target DD I skipped over some parts:
AMC:
https://preview.redd.it/yepocbae5i0d1.png?width=1528&format=png&auto=webp&s=b93611a7ce9866bd7686f9bdfbfaa10c707ff05d
I have taken the liberty to highlight the relevant parts in red, however if you look at the financials, AMC has an overall worse economics in FY 2024. The market didn't care though on 05/14/24, and pushed AMC from bankruptcy pricing of Market Cap to Cash on hand ratio of 1.16 to 2.89 within a single day. It also never had a positive shareholder equity, in fact in the 10K they are all called "Shareholder deficits". Never mind AMC has a big bomb strapped to its chest:
https://preview.redd.it/ijegq9up5i0d1.png?width=1140&format=png&auto=webp&s=d83791f9470105645bd7bfaca1116537857ab395
Yes you are reading this correctly. 2.9 BILLION dollars is due on 2026. In addition, 118.3 million dollars is due in 2025 and 25.1 million in 2024. Guess what? Aaron Adam sold $250 million dollars worth of equity this past Monday! Are you an AMC ape holding a bag? https://www.cnbc.com/2024/05/14/amc-raises-250-million-in-stock-sale-during-mondays-meme-rally.html. Hooray! AMC can extinguish that 2024 and 2025 debt immediately. Now Aaron will have to roll out AMC Preferred Equity #2 for 2026... How many shares do you think he needs to sell?
GME:
Did you know if you held GME when it was in the lowest of lows and rode Roaring Kitty/Keith Gill's GME wave, you would make better returns than the S&P 500 index? It's amazing really. Personally I haven't set foot in a Gamestop store in decades, and last I remember I stood in a Gamestop store it had smelly carpets and teenagers who didn't want to be working there. "He likes the stock" he says, but probably not the company itself. But hey, the stock is doing great!
https://preview.redd.it/m45dqw7r6i0d1.png?width=944&format=png&auto=webp&s=8ca574fe4207c75eb24adf0d73574e45890608d4
Did you see 2021? Holy shit. Anyways, shall we look at their finances?
https://preview.redd.it/5jy7hmva7i0d1.png?width=1199&format=png&auto=webp&s=52d445819bb3d736047004a468a2f677e6895ebf
I heard they pulled a profit in 2023, but you wouldn't see it by looking at their store operations. In fact GME got into profitability by cutting SG&A and will continuously cut to make their earnings look good. Did you see their revenue per store? It dropped. Did you see its profit margin per store YoY? it is negative or zero, choose which is less worse. Meaning any store they have remaining would be negligible in moving the profit per store needle. They already cut the under performing stores, and they are now cutting into useful ones.
On 05/14/24 though, GME pulled a rabbit out of its hat. It's Market cap to cash on hand ratio jumped from a static ~ 3.25 - 3.50 to a whopping 12.40. Congratulations Keith Gill.
As a conclusion, both Rainy and I have used different methods to come to the same conclusion:
Clover health is still being shorted to bankruptcy ratio, but the boot is less tight at the neck, now at 1.16. That being said, Clover still has ways to go before they can state they are no longer BK pegged. Again, Clover has plenty of room to grow and re-invigorate itself (Clover Home Care, Clover Assistant, and Clover Medicare Advantage), has adequate cash on hand, is cash flow positive, and is $100 million away from profitability (CA SaaS anyone?). This is why Rainy and I choose to invest into Clover. This is why the shorts are afraid of DD - it blows up their nonsense and makes their actions seem foolish. I am sure the shorts will keep mentioning that Clover is riding a meme wave, and once Clover gets under $1 the FUDs doom train will start. It is predictable and comical.
AMC definitely is heading towards BK by 2026 (almost guaranteed), unless someone does another Antara capital and exchanges the lien note as a rollover in exchange for AMC Preferred Equity units 2.0 (since retail likes holding bags). Despite this, Market has pegged AMC temporarily to a ratio of 3. AMC cannot reinvent itself, it is still losing money per screen, but someone still is trying to meme it to viability.
GME is not heading to BK, but it is definitely very very richly valued at ratio of 12.40 on 05/14/24. I do not consider GME a good investment, as it still needs to re-brand itself and re-invigorate itself (say, what happened to the NFT marketplace?). GME is memed up in value, but we do not foresee immediate bankruptcy concerns.
I would also like to reiterate again what our subreddit stands for: We do not provide financial advice, nor do we intend to do so. Do not invest into Clover Health based on meme stock valuation, and we will be the first to tell you to stay away from Clover Health stock if you do not understand the financials of this company, its goals, and the obstacles facing this small cap company.
Thank you for taking the time to read through this. I hope this provides you with a better perspective on what happened today.
Sincerely
Moocao
​