$NES Country. An Incredible 3-D Adventure In The Squeezing of Shorts : pennystocks

TL/DR:

Shorts haven’t covered and SI is between 129% – 241%, 0 shares to borrow, high borrow rates, avg short position is down over 3.6m.

An Update:

As of this morning, NES is trading around $3.00 on low volume. It had a phenomenal close on Friday gaining 26% after a roller coaster open. Today – I bring you an update to the original DD with some new data.

Squeeze Metrics:

Shorts have effectively done nothing since Friday. Not a lot of covering – but not a lot of shorting either. The number of shares shorted is estimated at 2.66m which is almost unchanged from last week. This tells me that they are 100% out of ammo or super low on ammo due to the heavy shorting activity that has taken place over the past 2 weeks where they used all/vast majority of their ammo. This also shows that the potential of $NES is still super high as shorts have not engaged in a lot of covering yet.

Below you will see the average short position’s current situation at 3.04 per share. The average short is down ~3.6m and taking on lots of water.

Float:

When looking at/calculating the float, the first thing to do is remove the two big holders (Ascribe + Gates) as well as the Insiders from the potential FF. This leaves us with about 2,086,892 shares. At a worst case scenario, the SI from this number is still over 100%, which is HUGE.

Diving deeper, let’s see if we can make another estimate of the free float. Let’s exclude the very low and low turnover holders from the tute float to start. That reduces the tute float by 456,037 which is close to 50% of the tute float. This gives us an SI of 163%. You can also be generous and assume that a lot of the medium – very high turnover funds dumped on the merger spike or the following days after, but this is all speculation. Either way, the SI is AT LEAST above 100% and more likely somewhere between ~129% and ~241%.

I am still bullish on this play and still holding. Iborrow and Fintel still show 0 shares to borrow at super high rates as well. I looked through the comments and I will try to address/recap some of the biggest concerns or questions about this play below.

FAQ:

• What is the ACTUAL short interest?

• What is the best/worst case scenario (My opinion)

  • Best case: This becomes SPRT or LGVN 2.0 and shorts get massively fucked

  • Worst case: it goes back to 1.65 because of the merger deal. 1.65 is essentially like a NAV floor with SPACs due to deal value of 1.65 per share

• Do shorts ACTUALLY have to cover?

  • For this play, one of two things will happen imo

  • First, shorts start taking on big losses and have to post higher and higher amounts of collateral due to margin reqs and start covering or even get margin called. This works because the margin req is super high (300%+ at some places) so as the stock goes higher, you have to post more collateral. This effect their entire portfolio and shorts are more likely to cover as the price increases because of this.

  • Secondly, as the prices increase, some smaller tutes or regular retail holders might start to sell. Remember how shorting works – you have to BORROW shares from SOMEBODY who OWNS the underlying security. If they no longer own it – then you have to cover. You also have to cover BEFORE they sell since you can’t borrow something from someone if they don’t own it. A good example would be if Fidelity wanted to dump their 245k stake. Given that Fidelity has 0 shares to borrow at the moment, all of those shares would need to be recalled before Fidelity can dump, so shorts would essentially pay their exit bill. This all works because the SI is so so so high and shorts are massively overextended.

• Where can I find the Original DD?

TL/DR:

• SI is at least over 100%, currently estimated to be between 129% and 241%

• Cost to borrow, margin reqs, ect… are all super high. 0 shares left to borrow

• Free float is estimated to be about 2.08m shares (969k tute / 1.1m public)

• 88% of the float is locked up due to the merger/support agreements (two large holders + insiders can’t sell)

• The avg short is down over 3.6m on their short position and its only getting worse

• None of this should be taken as financial advice, do your own DD and research