NorthWest Biotherapeutics Inc (NWBO)

[Chiugray]

GoodGuyBill, Well said. I believe we bring up synthetic naked shorting because if it’s as big as the data suggests, Retail Longs will want to understand the mechanics.

My hypothesis and thinking:
The manipulation is over many years, with many layers of synthetic short contracts, each with their own expiry dates and each short hedge funds (HF) and market makers (MM) having their own levels of financial strength to hold out on when a forced covering is put on them.

Therefore, a giant short squeeze likely comes in episodic eruptions rather than in a single spike. By Longs knowing this, they can avoid accidentally thinking a short squeeze is over, when it is not, and more importantly not to sell or trade shares too early or to accidentally let the Shorts “off the hook”.

Key points:
- Synthetic naked shorting is heavily concentrated around NWBO catalysts. This creates a cluster of liabilities.
- NWBO is 97.7% retail owned, most are many year old Longs (high due diligence), and “nobody is selling” (“diamond hands” holding onto a unicorn investment), so in the case of short squeeze, there is no early-stage, sell-side liquidity.

Mechanics, the Catalyst:
- Demand to buy spikes during catalysts
- When “nobody is selling”, the price rises or gaps-up to a level where bulk-shares are willing to be sold (price discovery)
- But we have market manipulators and price suppression tactics
- HFs have pre-arrangements with MMs to automatically enter into synthetic short contracts (low collateral, high leverage).
- Once entered, the MMs have to hedge by selling naked shares into the market.
- How many naked-short shares? Theoretically, as many shares as needed to satisfy the demand to buy shares, such that price does not go up. This happens over several weeks, such that price doesn’t gap too much and gives time to suppress the price back down.

A Math Example (Yahoo Finance Data):
NWBO has many catalysts. I just use the DCVax-L Phase 3 data one below.

- Anticipate-Data Lock, ~216M shares traded (6 weeks)
- Data Lock, 10/12/20, ~267M shares traded (4 weeks)
- Top Line Data release, 5/10/22, ~194M shares traded (4 weeks)
- JAMA publication, 11/17/22, ~107M shares traded (4 weeks)
- Total shares traded: 784M

If we assume a synthetic short rate of 80% (due to “nobody is selling”), that would mean hypothetically 627M naked shares were added to the cumulative short position just from this one catalyst.

These are just thoughts of mechanics and each can put in their own assumptions. Regardless, I believe most Longs understand and believe:
- in DCVax platform’s ultimate success
- previous catalysts = de-risked investment
- an asymmetric investment opportunity, and
- the multi-year bear raid and market manipulation will face a giant price recovery and price tag.

Final hypothesis: Watch for cumulative volume. If I believe there is a 1B naked short position, then if price gaps up to $5 on approval day on only 100M shares of volume, the math suggests then that 90% of the short position is still trapped, that kind of logic.