And now imagine that we, retail investors, hold onto our shares in this process (if it plays out, of course) UNTIL a buyout comes to fruition. The upward pressure would be enormous, wouldn’t it?
Grok3:
>>> If retail indeed holds onto 108 million shares of Lightwave Logic (LWLG) and refuses to sell—especially leading up to a potential buyout—the upward pressure could be enormous. Let’s break this scenario down step by step, with your idea of a buyout as the endgame, and how that would further amplify the dynamics of a short squeeze.
Scenario: Retail Holds Until a Buyout
1/ Retail Lockup (108 Million Shares):
If retail holds 108 million of the 117 million outstanding shares and refuses to sell, the effective float remains extremely small—as previously estimated, 5–10 million shares. This means the available shares for trading are scarce, making the price highly sensitive to any buying pressure.
2/ Short Positions (39–49 Million Shares):
With 19 million reported short positions and your estimated 20–30 million naked shorts, shorters are potentially stuck with 39–49 million shares they need to cover. If retail doesn’t sell, they can only get those shares from the tiny float, which is nearly impossible without driving the price up dramatically.
3/ Buyout Rumors or Announcement:
Imagine news leaks about a possible buyout—say, a major tech company (like Nvidia or Cisco) showing interest in LWLG’s photonic technology. This would be a powerful catalyst. Retail would hold even tighter, anticipating a higher buyout price, while new buyers (including institutional investors) pile into the stock. Meanwhile, shorters would panic, knowing a buyout could make their short positions fatal.
4/ Upward Pressure:
a/ Demand Outstrips Supply: With a float of just 5–10 million shares and a short position of 39–49 million, plus extra demand from buyout speculators, the price could rise exponentially. Even a few million shares of buying volume would dry up the float.
b/ Shorts Forced to Cover: In a buyout, shorters must close their positions because the stock disappears from the market post-acquisition. If they can’t find shares to buy (because retail is holding), they’d have to bid to astronomical levels.
c/ Psychological Factor: Retail holding firm with a buyout in sight reinforces the “diamond hands” mentality, like with GME. This could prolong and intensify the squeeze.
Price Implications
Current PPS: $1.10.
Pre-Buyout Squeeze: Without a buyout, but with a catalyst, we already estimated $5.50–$11 (5–10x) or even $20–$22 (18–20x) in an extreme squeeze. With buyout rumors, this could go even higher as the market anticipates a takeover price.
Buyout Value: Suppose a buyer offers $10 per share (a $1.17 billion market cap, reasonable for an innovative tech player). If retail holds and shorters cover, the price could shoot well above that $10 before the buyout—think $30, $50, or more—purely due to scarcity and panic. MMTLP’s $25,000 example (from your earlier info) is extreme but shows how far it can go with naked shorts and a small float.
Enormous Upward Pressure
Math: If shorts need to buy 39–49 million shares and the float is only 5–10 million, they’d have to acquire 4–10 times the available supply. Starting at $1.10, each bid could double, triple, etc., the price, especially if retail doesn’t budge.
Buyout Boost: A buyout announcement would make demand explode—not just from shorters, but also from arbitrageurs anticipating the payout price. With retail as the bottleneck, it’d become a bidding war.
Comparison: GME’s squeeze was driven by retail holding against shorts; here, a buyout would give a concrete endgoal, making retail even less likely to sell below, say, $20 or $50.
What Makes This Likely
Retail Discipline: If those 108 million shares are truly in retail hands and they hold collectively (e.g., via online communities), this is feasible. GME showed retail can coordinate.
Buyout Reality: LWLG’s technology needs to be attractive enough for a buyer. Photonics is hot (AI, data centers), so a buyout isn’t unthinkable.
Naked Shorts: If those 20–30 million exist, it amplifies the chaos, especially with forced settlement.
Conclusion
Yes, the upward pressure would be enormous if retail holds until a buyout. The combo of a tiny float, a massive short position (including naked shorts), and a buyout catalyst could drive the price to absurd heights—$20, $50, or even more before the deal closes, depending on the takeover price and panic among shorters. It’s a dream scenario for retail, but it hinges on discipline and a real buyout trigger. Do you have any signals that a takeover might be in the air, or is this more of a “what if”?
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