I think the BrkA volume-GME connection is really just the chaos of the CAT going into effect mixed with a little RK and RC/ATM action just to keep it confusing and spicy 🌶️

Let’s review the facts:

• The MSM reported in 2022 that the surge in BRKA volume was due to robinhood reporting fractional shares. (See this article for example: https://www.wsj.com/articles/robinhood-was-behind-phantom-surge-in-berkshire-hathaway-trade-volume-study-finds-11658309401) This reporting resulted from the publication of an academic paper which concluded it was robinhood self reporting fractionals driving up apparent berk-a volumes

Source: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4167890. -

• Ok that’s all well and good how does the CAT figure into this? Well the CAT went into effect on May 24

Source: https://www.finra.org/rules-guidance/guidance/reports/2024-finra-annual-regulatory-oversight-report/cat

• ”Finra said it was “already actively working on the issue, and is engaged in ongoing discussions with firms and regulators. The current trade reporting systems (other than the Consolidated Audit Trail do not support the entry of a fractional share quantity.””. Source: https://www.ft.com/content/71c40c08-9298-4324-a2b7-975fe68a6a49

Interesting….So the CAT does not necessarily count fractional shares as an integer….

• GME goes parabolic and BRKA volume tanks on June 6-7

• June 7 is about 7 trading days after the CAT went into effect on May 24th (remember the Memorial Day holiday on May 27th affected settlement) June 6 would be the T 6 MM exemption

Confusion/Conclusion: This looks to me like a market maker settlement exemption finally expiring right after the CAT went into effect so that the MMs fractional trades between May 24th June 6th still weren’t reported via the CAT and reported as whole shares while by June 7 all fractionals stopped being reported

As much as I would like to believe there is something crazy going on with Buffet and GME shorts collateral collapsing I think the more realistic conclusion is that it is really, just the dynamics of CAT reporting going into effect

Stay Frosty 🏴‍☠️🏴‍☠️🏴‍☠️🏴‍☠️

Edit 1 : clarified that while CAT does in fact support fractional shares (vs unsupported as I had erroneously said earlier as I misread the FT passage) it does not necessarily count them as integers - I will find the CAT rule on fractionals later and post it here and we’ll see if this theory holds any water

Update 22 Aug 2024: OK I found the updated Rule for fractional share trades of less than one share for CAT compliance:

Although the TRFs and the ORF do not currently support the entry of fractional share quantities, these trades are required to be reported subject to FINRA guidance, which requires rounding quantities up to one if less than one share and truncating the fractional quantity for transactions that involve both a whole-share and fractional-share quantity. Member firms are required to report order, route and trade events in NMS stocks and OTC equity securities to the CAT Central Repository, *including any fractional-share quantity.***

[source] https://www.finra.org/rules-guidance/guidance/reports/2023-finras-examination-and-risk-monitoring-program/fractional-shares

To conclude, the CAT system requires the fractional amount of shares to be reported and *does not round up the fractional quantity *. Therefore I believe that the coincidental decline in BrkA volume with GMEs runup June 6-7 is not evidence that BrkA was being used to inflate short sellers collateral and that the GME runup spoiled their nefarious scheme (the obligation warehouse at the DTCC is the real nefarious scheme imho). The fact that the CAT went into effect on the 24th while the reported BrkA volume tanked on the 7th is likely the result of a MM exemption expiring for trades in fractional BrkA before the CAT date.

🎤💧⬇️