It's the Zombie (stock) apocalypse!

General Discussion
#1

People are finding OTC stocks that are coming back from the dead. Mostly stocks that were once of viable businesses that “failed”.

Sears (SHLDQ) is up like 300% in the Frankfurt exchange today. It was up 28% here yesterday.

https://www.boerse-frankfurt.de/aktie/sears-holdings-corporation

The theory is that these were businesses shorted into the ground and now the shorts are having to be bought back. They sit in a basket with AMC/GME and the like and as others have been moving so are the Zombie ones. Sears has some very obvious pops that follow the other memes.

#2

very interesting. Now that i think about it, i wonder if this is the real reason everyone (myself included) received notices from their brokerages about new rules/regs regarding pink stocks.

#3

It’s “for your protection”. Those stocks are too scary for us to trade.

#4

oh that’s right. thanks SEC for keeping us safe. Now you can get back to your porn.

2 Likes
#5

Sears is up 76% an hour and a half into trading

#6

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Something to consider.

Anyone find EMMUF’s there?

#7

Sears is up 118% now. Only one retail broker can trade it so not sure this sudden retail interest is the only reasn it’s moving

#8

just heard it’s up to 176% now. And get this - blockbuster up 1700%!

#9

The blockbuster one shows as a holding company. Seems a little strange. We’ll see what the next week brings

#10

So I’ve finally completely wrapped my head around this.

They short to the point that the stock is delisted from the exchange. Once on the OTC market they can basically beat it into oblivion due to less people buying the stock and basically nobody watches the pink sheet stocks. The profits they are making are unrealized gains but they are applied to their margin so they are able to show it as an “asset” and use it as such. Their hope is the company goes bankrupt and then they won’t pay the taxes on the gains since they never closed out the position. If they close the position out prior to bankruptcy they would have to pay on those actual profits.

If they are bleeding somewhere (AMC/GME) else they will close out some of their positions to try and help manage the other stock that they are loosing control of. That zombie stock will run up as they close those shorts (look at Sears and Blockbuster during the Jan GME run up)

I think AMC started basically as a run up due to them having to close some shorts as GME ran. GME was the start and where they got their hand caught in the cookie jar but as they had to close other shorts to cover the bleeding we saw the pop and dove in. Now they can’t get us out.

That 1800% run on Blockbuster yesterday must have been SUPER painful for them. This makes sense why they are trying to put regs into place to reduce buying of OTC stocks. If retail figures out that those super cheap stocks were heavily shorted we would buy the crap out of them (and kinda just did).

2 Likes
#11

not sure if you read this but it explains exactly what you’ve written

#12

Ya I saw the possible Amazon tie in. I was more trying to wrap my head around why these zombie stocks were still tied into the AMC/GME play and why they would pop along with the active squeeze plays.

#13

leverage! apparently, just because a stock is delisted it’s not dead. They shorted these companies into oblivion but never closed out their positions. It seems they are running up the stock for capital and tax obligation avoidance (why pay $50b on taxes when you can raise the stock price and use $700b in leverage?). Someone brought up a great point re: new sec rules on OTC stocks, which basically says of these positions.

“You wouldn’t want millions of Apes piling into a stock at $0.005 per share when you have billions of shorts there now would you?”

1 Like
#14

I want to know what ticker is in orange on that chart. They popped HARD

#15

blockbuster maybe? It was up 1800% friday

#16

just came across this. Seems OTC stocks are being moved to an “expert” exchange that will be off limits to retail for the usual reasons: to protect us from ourselves.

OTC Stocks Moving To Expert Market Sept 28

#17

I was reading that yesterday. Total BS if it’s true

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