So, the GameStop saga is brilliant and it’s still going on. Today, we’re going to poke fun at the markets (again), because one user pointed out something ridiculously bonkers with a specific ETF that holds GME.
That ETF is XRT (SPDR S&P Retail ETF – NYSEARCA). I also have previous commentary in this tangentially related posts about it here.
So, some user on Reddit pointed out that the institutional ownership of a single Fund was greater than the Free float.
This -somewhat erroneous- post;
This post has some wrong information in the title, for instance; the float isn’t exactly 7 Million shares. So ignore that blunder and let’s focus on a better term instead of ‘float’. The ‘Shares Outstanding’.
The total amount of shares in ‘registered’ existence, or ‘shares outstanding’ is supposed to be somewhere in the ball park of 8ish million from various sources. Market Watch says 9ish;
ETF channel says about 7.9 million;
If we were to reverse engineer and do math with the market cap;
489.46M shares divided by spot price of 67.51 USD gives us about 7.2 Million shares.
Here’s a funny thing I found about that ‘Market Cap’
So I’ve written that Market Caps are a scam which is true and so Market Cap values are estimates and typically wrong, on top of being made up.
So, XRT per SSGA, the custodian, website has the asset under management to be pretty high;
So you’re telling me a Fund with 612 million dollars Asset under Management (AUM), has a market cap of 489M?
Yea, totally. Makes total sense. Yea, keep it up. No- What the fuck?
That’s like saying if you spent a dollar to purchase a piece of this basket, you get two dollars in value.
That sounds broken as fuck, there’s obviously something fucky going on here.
SSGA has their Shares outstanding at 9.25 Million shares.
Let’s go with that number as the ‘accurate’ shares outstanding. Since, you know, they (SSGA) are in charge of the fund.
So, if the Shares Outstanding is 9.25 Million. . .
How the Fuck
Do we have a bunch of SEC Form 13F’s from multiple investors cumulatively owning way the fuck more than 9.25 Million?
I mean, sure there might be some settlement issues and timing with the filing due to the Continuous Net Settlement system, but they wouldn’t account for this many Shares. This is an egregious amount of shares.
So, for math’s sake, I added the top ten holders of XRT and got 42,021,251 shares. Top ten. Like eleventh place owns about 1,450,000 shares. and a few more below own at least a million as well. So I’m doing it simplified and conservatively to show you -by the numbers- that this is fucked.
Yea, I get that continuous Net Settlement is shitty and lazy, but you can’t blame that for resulting in ATLEAST 33 million additional shares.
Like, that’s like 450% minimum times the total that there should be.
I don’t know about you, but that’s fucked.
And if you,
Couple that above information with the fact that XRT is a threshold security;
Then it points to evidence that XRT is being shorted to bonkers-level. Meaning that people are re-hypothecating shares enough times to result in 450% ADDITIONAL counterfeit shares.
Disclaimer, I’m not saying you should invest or buy XRT in hopes of some sort of short squeeze or some other retarded fascination of mental disabled financial-self-flagellation. You would likely have a bad time and that bet probably won’t pan out. Unless you’re a Financial Masochist, it’s best to keep your dick out of box spreads.
Yea, shorting and perpetuating shorts without closing results in counterfeit shares. Two-sides of the same coin type deal, one side is (naked) short, the other side is (counterfeit) long.
How do I know that it’s counterfeit shares?
Well, 33 million extra shares being counted as ‘in the books’ for multiple 13F reports by investors is a smoking gun. Whether those shares are fully settled or not -doesn’t matter, if enough people are counting cumulatively 33 million extra shares.
And Counterfeit shares that perpetuate in existence implies naked shorting.
I mean, if you never intend to close your short position, then you never cared about having to cover or close.
Just think about it.
This is evidenced by the fact that 33 million extra shares, at a minimum -no less, were found to be in the hands of multiple investors. Sounds like a good case of borrowing to sell something that isn’t there.
If you study the alchemy of equivalent exchange and know that things have their opposites, then this is obvious ‘wealth’ creation by some degenerate market swindlers.
I found this a bit later, but another user pointed out Fintel has short interest;
Yea, 31 million shares in short interest.
You can’t make up how retarded this is.
I think what’s amazing is,
Per the original post by the user,
The top five investors own about 1.735 Billion dollars worth of XRT.
Yes. that’s RIGHT.
The top 5 reported investors of XRT own more value of XRT than XRT’s total Asset under management.
Doesn’t that sound like a clown fucking thing?
And that’s not including every other investor invested in the fund outside of the top five. That’s a lot of money.
And we already pointed out that the ‘market cap’ didn’t even make sense compared to the AUM. So now the top five holders are holding more than the AUM.
Sounds like they’re getting fleeced or some one is fucking with these numbahs.
The dangerous thing about this is,
That the top holder is Healthcare of Ontario Pension Plan Trust Fund owns 8 million shares with a valuation of 470.6M.
They own more than 86% of the fund themselves.
So if, heaven forbids, XRT ever goes tits up – then Ontario Pension Plan Trust Fund would be down a pretty percentage of their billions AUM. Meaning people of Ontario would be losing a good chunk of their retirement savings and pensions. Yea, another reason why retirements are scams, don’t forget 2008 too.
I mean, currently they have assets invested in XRT worth around 470.6M, which is somehow having a market cap of 489M. So they own about 86% of XRT with a relative comparison of the Market cap ownership to be at 96%. So they’re supposed to have 10% more ownership or valuation when compared to Market Capitalization. But of course Market Caps are a scam, so that number is trash and that analysis is based on the trash number.
It just turns out, everything else is a scam because apparently numbers don’t mean anything when you have 33 milly extra shares.
Yet with their ownership of 86% of XRT, they only have a valuation of 470.6Million dollars, when the AUM of XRT is, per SSGA, 612M.
So you own 86% of the Fund and yet you only own about 76% of the AUM?
Sounds like they’re getting Swindled, bamboozled, and -dare I say- Fucked.
And everyone else who invested is in a similar position of also getting short changed.
I don’t know if you heard recently, but a degeneratively ‘Slow’ Fund called ‘Melvin Capital’ was gambling Teacher’s pension funds and lost the majority of that cash through some asymmetrical lopsided bets against idiosyncratic risks.
Point is, Hedge funds and the like need a bag holder, and they sure as hell are willing to make Pension Funds and pension plans the bag holder. In the search for profit, they will take your teachers, firefighters, government workers, state’s pensions, and even the cops.
You might as well blame police brutality on Hedge funds because they are the ones gambling and risking pension funds resulting in uncertainty and stress to people like cops who inevitably take it out on citizens. Yea, I’m technically correct, quote me on that.
So, keep that in mind when you hear or see a large government or public trust investing a shit ton in any specific asset. There may be malicious intent and corrupt bribed debauchery behind the scenes. It’s happened plenty of times before, I’m sure it can definitely happen again . . . still.
I think moving forward,
It’s not clear that ETFs have anywhere near the extensive reporting requirements of actual public companies.
Also, what’s the point of inverse ETFs if people are going to directly short ETFs anyway? The market structure is retarded and inefficient.
ETFs don’t have to file an 8k or 10k like companies do. The Custodians of ETFs have to file some forms via the SEC, but the filing requirements are barebones and dry focusing on the fund’s allocation rather than the fund’s integrity. So, with a lack of proper reporting requirements, and a lack of give-a-fuck from the custodians and it’s investors, it seems the funds can be riddled with inconsistencies and a bunch of retarded phantom shares.
By the by, You also typically don’t get voting rights to anything if you own an ETF, just a heads up. Plus Proxy Voting is a scam anyways.
Yet all the heavy weight investors with a sizeable investment in an ETF have to report their 13G or 13A forms. And if no one is lying, then it would be in the fiduciary interest to finding out how everyone could own more than the actually underlying in existence.
Point is, the reporting practices for ETFs make it really shady and it seems as though there isn’t accountability from the ETF custodians to actually manage the integrity of the ETF.
To be clear, I don’t blame the ETF custodians. I don’t necessarily blame anyone really. It’s -how you say- a tragedy that we fail to have accountability. Like a hit and run with the driver at the wheel being oblivious to it all. I mean, how were they to know? (unless they knew, then they’re culpable, but Benefit of the doubt).
Thus, ETFs are definitely not a safe bet. Again, I don’t recommend going long or short any ETFs.
On top of that, ETFs are literally invested in companies with actual value production outside of allocation.
So, ETFs being shitty actually drag the viable companies that are stuck in the ETF’s basket. Meaning real companies suffer from the negligence of ETF custodians and investors. It’s like tying concrete bricks to everyone.
If companies are investment vehicles like a shipping vessel, then Having ETFs (not just investing in ETFs) means that you’re trying ships together. If there’s a black swan event then everything is gunna get wrecked. It’s like tying ships together in a storm, it’s a really really retarded thing.
So, all around a bad deal for investors, the market, ETFs, Companies, everyone and your Mother.
I just wanted to point something I found ridiculously funny.
Like the amount of corruption and lack of trust in the US Markets is Ludacrisly at Clown Levels.
Of course, not everyone knows this nor feels this way. And a good chunk of investors still have ‘faith’ in the authority and trust of the Markets. US markets or otherwise. Call it a matter of ‘perspective’ if you will.
I could write trilogies and epics on the wisdom of avarice, but alas, fuck that.
I think it’s funny. You know, you gotta admit that this is all silly bidness. The world, the markets, funny-money, it’s all a charade. A song and dance in the cosmic pony show.
Whatever, my world’s on fire, how about yours?
*Not Valid Financial, Legal, Life, or Any Advice
2 thoughts on “XRT, ETF Tom Foolery in the Capital Markets”
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