Exhibit 4 — In re January 2021 Short Squeeze Trading Litigation (Dkt. 568-4, S.D. Fla.)
Summary
Exhibit 4 (Document 568-4) in In re January 2021 Short Squeeze Trading Litigation, Case No. 1:21-MD-2989-CMA (Case 1:21-md-02989-CMA), in the U.S. District Court for the Southern District of Florida, entered on the FLSD docket June 8, 2023: 15 pages of excerpts from the transcript of the videotape deposition via Zoom of Alvan C. Chow, taken Tuesday, April 25, 2023 and reported by Silvia P. Wage, CCR, CRR, RPR. In the excerpted testimony Chow states that an initial interest in GME was sparked by an investment made by Dr. Michael Burry, that about a dozen hours of research preceded the initial investment, that the high shortage risk in GME made it more appealing, and that Wall Street Bets was a community known for very reckless investments. The excerpt ends with the errata and signature page dated 5/25/2023.
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Cite this document
“Exhibit 4 (Dkt. 568-4).”
Original at archive.org. Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/2023-06-08-covid-era-misc-ef8414f5-1/
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Case 1:21-md-02989-CMA Document 568-4 Entered on FLSD Docket 06/08/2023 Page 1 of 15
Exhibit 4
Case 1:21-md-02989-CMA Document 568-4 Entered on FLSD Docket 06/08/2023 Page 2 of 15
Page 1
1
2 IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF FLORIDA
3 CASE NO. 1:21-MD-2989-CMA
4 IN RE: :
:
5 JANUARY 2021 SHORT :
SQUEEZE TRADING :
6 LITIGATION :
:
7 ------------------------ :
8
9 VIDEOTAPE DEPOSITION VIA ZOOM OF:
10 ALVAN C. CHOW
11 TUESDAY, APRIL 25, 2023
12
13
14
15
16
17
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22
23
24 REPORTED BY:
25 SILVIA P. WAGE, CCR, CRR, RPR
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1 ALVAN C. CHOW 1 ALVAN C. CHOW
2 interest in GME? 2 2020?
3 A. My initial interest was sparked by an 3 A. Yes.
4 investment made by Dr. Michael Burry. 4 Q. Was this the first time that you
5 Q. And Dr. Michael Burry is the guy from 5 posted on Wall Street Bets, if you recall?
6 the mortgage backed securities, he's the guy in 6 A. No.
7 "The Big Short," right? 7 Q. Do you frequently post on Wall Street
8 A. That's correct. 8 Bets prior to this time?
9 Q. And how much research did you do into 9 A. No.
10 GME prior to your initial investment? 10 Q. And on the intro section about
11 A. A dozen hours maybe. 11 halfway down the page, do you see where you
12 Q. Did you say a thousand hours? 12 write, "Sup gamblers feel bad about missing the
13 A. No, a dozen, dozen. 13 game train on Tesla. Fear not. Something much
14 Q. "A dozen," okay, sorry. I really 14 greater and stupider is here"?
15 misheard you there. 15 A. Yes.
16 Did the high shortage risk in GME 16 Q. And what do you mean by "gamblers"?
17 make it more appealing to you as a potential 17 A. Wall Street Bets was a community
18 investment? 18 known for very reckless investments, to the point
19 A. Yes. 19 where they're not investments. They're just
20 Q. And why is that? 20 buying options, which is very similar to a
21 A. Because it was a signal to me that 21 gambling activity, where, you know, the outcomes
22 the market was -- the perception was heavily 22 can be drastic.
23 skewed to the down side for that company. So 23 Q. So were you suggesting that this --
24 there was, you know, a tremendous negative 24 were you referring to people who might be
25 sentiment on GameStop, which I believed to be 25 interested in making a relatively speculative
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1 ALVAN C. CHOW 1 ALVAN C. CHOW
2 false. 2 stock investment then when you said "gamblers"?
3 Q. So you disagreed with the views of a 3 A. Right, right.
4 lot of these short sellers, right? 4 Q. And around this time had there been a
5 A. Correct. 5 big, you know, price run up of Tesla stock in
6 MS. YOUNG: Let's look at Tab 1. I 6 investors that hadn't gotten in on the ground
7 think this will be 207. 7 floor and sort of missed out on that; is that
8 (Deposition Exhibit 207, post titled, 8 what the reference to Tesla is about?
9 "The Real Greatest Short Burn of the Century," 9 A. Yes.
10 was marked for identification.) 10 Q. And so when you wrote, "something
11 Q. I think if you -- this should just 11 much greater and stupider is here," you're
12 take a second. It looks like it's loading. It 12 talking about GameStop?
13 should be available now. 13 A. Yes.
14 We can screen share it or you can 14 Q. In the next paragraph, you talk about
15 pull it up on your own, Mr. Chow. It's up to 15 Citadel, right?
16 you, whatever is more convenient. 16 A. Yes.
17 A. Which tab? 17 Q. And you write, "We're going to
18 Q. Sorry. It's Exhibit 207/Tab 1. 18 temporarily join forces with the Galatic Empire
19 A. Okay, I'm pulling it up. 19 hijack the Death Star."
20 Q. Thank you. 20 By "Death Star" were you referring to
21 And do you recognize this document 21 Citadel?
22 whenever you have it in front of you? 22 A. Yes.
23 A. Yes, I do. 23 Q. And who is "we"?
24 Q. And is this a post from you to the 24 A. "We" is whoever chooses to believe in
25 sub-Reddit at Wall Street Bets on September 9th, 25 my analysis.
11 (Pages 38 - 41)
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2 that there was a high likelihood that GME could 2 if someone provides a piece of evidence that's
3 hit $400 a share, did you think that there was a 3 compelling and it disproves what I have to say.
4 high likelihood it could hit that when you factor 4 So I engage with them to extract as much
5 in, you know, short interest and the possibility 5 information I can from them to see if I'm wrong.
6 of a squeeze? 6 That's why I talked with them.
7 A. Yeah, I think -- yeah, I think, it 7 Q. So it's fair to say you kind of
8 probably should have went even higher. But 400 8 wanted to debate with or learn from these other
9 felt, you know, very good to me. 9 users?
10 Q. And why did you say that it probably 10 A. Right. Especially the ones that
11 should have gone even higher? 11 disagreed with me so that, you know --
12 A. You know, this probably intersects 12 Q. It's way of stress testing your
13 with while we're here in the halts. I think that 13 theory?
14 if -- you know, it's just so hard to say. I just 14 A. Yes.
15 don't know because what happened happened. But 15 MS. YOUNG: Let's go to Tab 4, which
16 it seems to me that the halts caused some sort of 16 I think will be Exhibit 210.
17 disruption in the price and, you know, if there's 17 (Deposition Exhibit 210, Reddit
18 nothing that happened, it would have gone higher. 18 thread, was marked for identification.)
19 Q. So, when you said you were pricing 19 Q. I think it should be available now.
20 for "insanity," how did you account for that 20 Do you see that?
21 expected insanity? 21 A. Yes.
22 A. I think the strongest analog is just 22 Q. And do you recognize this document?
23 to look at Tesla. 23 A. I do.
24 Q. Where you felt that Tesla's stock 24 Q. And this is Wall Street Bets post you
25 price became disconnected from its underlying 25 made on December 1st, 2020?
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1 ALVAN C. CHOW 1 ALVAN C. CHOW
2 fundamentals? 2 A. Yes.
3 A. Not so much that it was disconnected 3 Q. And it's titled, "The Real Greatest
4 but just that it was a very fervor belief that 4 Short Burn of the Century Part 3 GME Infinity
5 the company, you know, had a very bright future. 5 War"?
6 Q. And then you characterized -- this is 6 A. Yes.
7 a little bit further down. You said, "I think 7 Q. And near the top you write that
8 more value investing plus short burn, cherry on 8 you're posting that, "The final warning bell in
9 top." 9 that next time I post in 2021 will be to recap
10 Do you see that? I think it's about 10 the squeeze's result and post game porn along
11 midway down the page. 11 with Deep Fucking Value and others."
12 A. Yes. 12 And that, "This is the last stop
13 Q. So you thought that a GME turnaround 13 before the moon mission."
14 was possible coupled with the possibility of a 14 A. Yes.
15 short burn, right? 15 Q. Do you see that?
16 A. Yes. 16 And why did you want to warn others
17 Q. And both of these factors were 17 in this way?
18 important to you or important to your thesis 18 A. I make these, you know, consecutive
19 about GameStop, right? 19 posts because there's -- there was so much
20 A. Yes. 20 happening and so many changes going on at the
21 Q. And why did you engage with other 21 company at that moment that I thought, you know,
22 users on social media that were commenting on 22 people who were nice enough to read my previous
23 these posts? 23 posts, I should keep them in the loop, in case
24 A. I consistently tried to look for 24 anything changed. And, to me, at that point,
25 holes in my thesis so I that can exit, you know, 25 nothing had changed. In fact, the thesis had
24 (Pages 90 - 93)
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2 become even stronger. 2 And so it seems easier to make like
3 Q. And at this point, you referred to a 3 large pronouncements, which is why I enjoy
4 "squeeze" rather than a short burn. 4 engaging with them individually. But, yeah, I
5 At this point in time, did you have a 5 don't know how else to, like, talk to, you know,
6 view that that would be more of a short squeeze 6 like everyone that wants and, you know, sort of
7 in GME rather than a short burn? 7 like identify the people who are interested in
8 A. I guess. I guess so. That's why I 8 evaluating the stock so that we can continue to,
9 wrote that word. 9 like, find information, right.
10 Q. And you mentioned Deep Fucking Value 10 So, if I engage with viewers in this
11 here along with a couple of other Reddit users. 11 way, then it's more extremist than the people who
12 Why did you mention this group of 12 disagree can come out and then I can talk to
13 users? 13 them. And, of course, you know, people who
14 A. I think I had been conversing with 14 already agree, I don't really care about, you
15 them, you know, either directly or in a group and 15 know.
16 they -- they shared my view and I was happy to 16 Q. And you mention that GME would
17 have some friends. 17 release Q3 earnings a week later on December 8th,
18 Q. And I think you testified earlier 18 I think.
19 that you thought that Mr. Gill didn't emphasize 19 Is that why you thought that this was
20 the importance of Ryan Cohen's involvement in the 20 "the last stop before the moon"?
21 company quite as significantly as you; is that 21 A. Yes.
22 right? 22 Q. So you expected the GME stock price
23 A. Yes. 23 would increase after earnings?
24 Q. But were there any other kind of 24 A. Yes.
25 differences in your investment thesis or strategy 25 Q. And further down you say that, "The
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2 with respect to GME that you observed? 2 GME story can be broken up in two main theses and
3 A. I think he was a much more thorough 3 that GME is both the deep value play and an
4 analyst than me. That's really all I can say. 4 infinity short squeeze, which was credibility all
5 Q. "He" being Gill? 5 on its own."
6 A. Yes. 6 And then you say, "When combining the
7 Q. And when you say, The next time you 7 two, you get the trade of a lifetime."
8 post, you'll "recap the squeeze's result and post 8 I think this is under -- this is
9 game porn" and "this is the last stop before the 9 under "GME Overview," that first paragraph there.
10 moon mission," you know, did you at all hope that 10 Do you see that?
11 this post would gin up support for GME? 11 A. Yes.
12 A. I think for the people who agreed, 12 Q. And what's an "infinity short
13 you know, people who had been following along 13 squeeze"?
14 this entire time, I was just providing more and 14 A. It's a planned infinity war title.
15 more information. But if you disagreed, I mean, 15 It's just a short squeeze.
16 more power to you. 16 Q. And this is about three months since
17 Q. So fair to say you weren't actively, 17 your first post about GME. At least, I think so.
18 you know, trying to convince people to invest, 18 Why were you still convinced that
19 but for the people who also saw value or, you 19 there would be a squeeze?
20 know, agreed with your investment thesis, you 20 A. Well, I guess, cause to me like just
21 know, you did hope that they would support GME? 21 the company keeps getting better, right. And the
22 A. Yes. It's just the nature of these 22 shorts are not closing their position. So that's
23 forums where I don't actually know, you know, who 23 why I thought it would happen.
24 I am talking to. I could just be talking to 24 Q. And further down you write, "I have
25 nobody. 25 never ever seen a trade set up like this before.
25 (Pages 94 - 97)
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2 I poured over every source of historical finance 2 before anyone else did and we were the ones to do
3 material that I can get my hands out. Still have 3 it, not Ray Dalio, not Warren Buffet or not --
4 nothing to reference to. In my opinion, this 4 you know, whoever, Paul Tudor Jones. It was the
5 will look more like the 2008 MBS bet." 5 retail people. And so I think that's a good win
6 Does "MBS" refer to mortgage-backed 6 for the small guys.
7 securities? 7 Q. And by, "we," are you referring to
8 A. Yes. 8 like the Wall Street Bets community, the retail
9 Q. And what parallel were you drawing 9 investors on the site?
10 here to the, you know, to the 2008 10 A. Yes.
11 mortgage-backed securities bet? 11 Q. And you saw this community as being,
12 A. The fact that -- so, if you short a 12 at least, partially responsible for the price run
13 stock, by nature you are borrowing against. So 13 up of GME?
14 that's the inherent leverage built into it. 14 A. I, actually, don't think so. You
15 There's the lack of liquidity and then there's 15 know, the buying power collectively of Wall
16 the general consensus that's wrong. 16 Street Bets at the time was very very little.
17 And all these three things were 17 Again, you know, these crazy price movements
18 present in the 2008 mortgage-backed security bet 18 really just happened after Andrew Left of Citron,
19 where people were, you know, had eight different 19 you know, started to make a fuss and, of course,
20 mortgages. There was no one to sell it to and, 20 Ryan Cohen increasing his stake.
21 you know, they were wrong to expect the economy 21 You know, before all the media
22 to continue or whatever the personal lifestyle. 22 attention, Wall Street Bets was maybe a less than
23 So it's drastic in the amount of 23 a tenth of what it is today. Only after was it
24 people that, I guess, you know, involved. And 24 revealed that we discovered that everyone sort of
25 it's just such a strong, you know, price 25 joined. So I think that, like, the impact of
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2 correction that I thought it would be equivalent 2 Wall Street Bets is drastically overstated. We
3 to, you know, something as attention grabbing as 3 were just the first ones.
4 2008. 4 Q. But here you wrote with, "no
5 Q. And beneath that you say, "Just stay 5 community other than Wall Street Bets's name next
6 fucking face ripping out of nowhere legendary HOF 6 to it in the history books," right?
7 ticker bet that will bankrupt some funds and get 7 A. Yes.
8 people fired. And, of course, but no community 8 Q. And that's referring to GME?
9 other than WSB's name next to it in the history 9 A. Yes. Like, we predicted it, right.
10 books. And if I could pencil only our own lovely 10 Q. Right.
11 GME Discord and Roaring Kitty's YouTube stream." 11 And so you're saying that -- you're
12 Do you see that? 12 not saying that some of these other investors are
13 A. Yes. 13 listed in the history books next to GME, right,
14 Q. And what's the reference to the 14 just the Wall Street Bets community?
15 "legendary HOF ticker bet"? 15 A. Yes.
16 A. That's GameStop. 16 Q. And you also mentioned the GME
17 Q. And when you say, that this is a bet 17 Discord and Roaring Kitty's YouTube.
18 "with no community other than Wall Street Bets 18 Why did you mention those sites or
19 name next to it in the history books," what did 19 platforms?
20 you mean by that? 20 A. So that they could be recorded as
21 A. Look, I think, for a long time retail 21 part of history.
22 was not well-respected. I think that's probably 22 Q. Because you saw those, you know, the
23 still the case. So this is a time where we found 23 GME Discord and Roaring Kitty's YouTube as
24 a price -- sorry. 24 contributing to the success of this bet on GME?
25 We found a company that was mispriced 25 A. There is a small group of people who
26 (Pages 98 - 101)
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2 were collaborating for, you know, streaming 2 Q. And so, when you say, "consensus,"
3 information. And, you know, I have a limited 3 you're saying consensus that's contrary to your
4 amount of time, limited amount of energy and 4 view?
5 focus and, you know, it's very helpful when other 5 A. The "consensus" was that GameStop
6 people can bring something to the table, 6 would go bankrupt, yeah.
7 something we haven't seen. You know, they just 7 Q. Right.
8 crawl the entire Internet web and, you know, 8 And so part of the factors that you
9 share information. So I am thankful for their 9 thought would lead to a "bubble" is that the
10 contributions and a lot of that was, like, 10 consensus was inconsistent with your conclusion?
11 brought up to Roaring Kitty and his YouTube 11 A. Yes.
12 streams. 12 Q. And No. 10 on the list of Avengers --
13 Q. And you saw that the sharing of 13 and this is on the second page -- says, "most
14 information on those platforms as contributing to 14 importantly you."
15 the success of this bet on GME; is that right? 15 And then it says beneath that, "CNBC
16 A. It helped me refine my thesis, yeah. 16 and other misled egotistic mass media companies
17 Q. If you look further down on the page, 17 and institutional investors continue time and
18 there is a header that states, "Act Two Avengers 18 time again look down upon the new generation of
19 assemble." 19 traders and laugh at Wall Street Bets. Tell me
20 A. Yeah. 20 which one of them has read all of the Moody's
21 Q. It's in bold. 21 credit reports on GME? Which one of them
22 Do you see that? 22 livestreams collaborative GME due diligence 20
23 A. Yes. 23 plus hours a week for six months plus straight?"
24 Q. And then beneath that, right below 24 This sentiment that you're -- you
25 the header numbered one, you say, "Let me show 25 know, expressed about institutional investors
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1 ALVAN C. CHOW 1 ALVAN C. CHOW
2 you the ridiculous Avengers teams we have. By 2 looking down upon the new generation of traders
3 Avengers team, I mean, all the bullish cases," 3 and laughing at Wall Street Bets, did that
4 and then there is a numbered list beneath that. 4 contribute to your desire to hold or buy or hold
5 Why did you analogize the bullish 5 GME at this time?
6 cases for GME to the Avengers? 6 A. No.
7 A. That was one of my favorite movies at 7 Q. So why did you mention this?
8 the time. So I was just paying homage to them. 8 A. Well, I -- I find buy and hold
9 Q. And No. 6 on the list -- this is if 9 GameStop because I believe in, you know,
10 you -- you have to go down to the next page. You 10 turnaround story. I believe it's mispriced. I
11 mention three signs of a bubble, "leverage, lack 11 believe, you know, I can make money from it. I
12 of liquidity and consensus." 12 think it's just very interesting that -- my brain
13 And you say that, "consensus is a 13 is, like, slowing down -- that, you know, even
14 necessary factor in identifying a bubble." 14 when we -- even when we shared all the stuff on
15 What does that mean in the context of 15 line publically, people still refused to look at
16 GME? 16 the facts. So that was very interesting to me.
17 A. Yeah. Well, it seemed to me that the 17 Sorry. It's like, hey, this apple is
18 market was extremely bearish on GameStop. That 18 red and everyone is saying it's purple. It's
19 was the consensus that it would go bankrupt. So 19 like what the heck is going on.
20 everywhere online like most of the other forums 20 Q. And who are the people that you say
21 that I would read or any analysis about GameStop 21 "refused to look at the facts"?
22 was bearish. So everyone thought it would go 22 A. So media news outlets, a lot of
23 bankrupt except for, you know, a handful of 23 people online who were posting on bearish
24 people, couple dozen probably that did enough of 24 articles, you know, it's reflective in the short
25 the work to know that that's not true. 25 interest. I didn't know who those shorts were,
27 (Pages 102 - 105)
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2 but they increased their position. So, 2 trade," you suggest that price target is easily
3 obviously, they disagreed. 3 over 100 and that the Jeff Amazon target is 420.
4 Q. And so you included this not because 4 What's the reference to a hundred
5 it was important to your investment thesis but 5 dollar a share target here?
6 just because you thought it was interesting? 6 A. I can't recall. It probably has to
7 A. Well, because I wanted to make a 7 do with something with price to sales ratio,
8 point that, you know, I don't think that they 8 price of earnings.
9 have the right analysis and we do. A lot of 9 Q. So does that suggest that -- so
10 their analysis is very shallow, right. So they 10 what's the difference then between that hundred
11 just -- oh, they say, bull blockbuster, 11 dollar share target and the $420 a share target?
12 blockbuster, it's going to go bankrupt, whatever, 12 A. You know, when Tesla was experiencing
13 but they didn't do the work like we did. 13 its own short burn, I had purchased it, you know
14 Q. And you saw this online community on 14 -- so this is pre-split prices. So I purchased
15 Wall Street Bets, you know, that had done this 15 it around 180 and it went to 420 and I sold --
16 actual research as being, you know, some of the 16 actually, sorry.
17 "Avengers" that were bullish on GME? 17 I purchased it around 180 and it went
18 A. I posted to Wall Street Bets, you 18 to 360, which is its all time high, and I sold at
19 know, agnostic of who was on it. But I just 19 360. Who would have known that it went to over,
20 wanted to, like, communicate to, you know, the 20 like, $3,000, right. So there's a conservative
21 people in support of this company that it seemed 21 price target and there's a very, you know -- you
22 to me that nobody else did as much work as we 22 know, outlandish price target. For reasons we
23 did, right. 23 don't know why, but that's why I accounted for
24 So, you know, Wall Street Bets is 24 that fact. Like, this -- I'm just analoging from
25 very big. You know, you can make a posting and 25 Tesla, right. I think, like, that there can
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1 ALVAN C. CHOW 1 ALVAN C. CHOW
2 nobody really cares but... 2 about so much --
3 Yeah, I was just trying to 3 Q. I'm sorry. I didn't mean to
4 communicate a position to people who are in my 4 interrupt you.
5 camp. 5 A. No, no, go ahead.
6 Q. And when you say, "my camp," did you 6 Q. No, no, please.
7 feel a sense of, you know, unity within this 7 A. There can be some price appreciation
8 online community of retail investors that were 8 and there can be, you know, one that makes, you
9 supportive of GME? 9 know, makes you re-evaluate how you view the
10 A. It's a very small subset of Wall 10 world.
11 Street Bets, which is very -- you know, I think 11 Q. And so is 420 a share the more
12 it was like 800,000 or a million people at the 12 outlandish price target?
13 time. It was a small subset of people on Wall 13 A. Yeah, relative to a hundred, yeah.
14 Street Bets. I don't -- again, I don't know who 14 Q. A hundred dollars a share was the
15 they are. But I just wanted to communicate to 15 more conservative GME price target, in your view,
16 those people, just probably a couple dozen 16 at that time, at least?
17 handful of people. 17 A. Yes.
18 Q. So a subset of that community maybe 18 Q. And so what did the, you know, $420 a
19 is more accurate to say? 19 share price target for GME, what did that account
20 A. Yes, "a subset" of Wall Street Bets. 20 for that the hundred dollar share price target
21 Q. And the reference to "livestream 21 didn't account for?
22 collaborative GME due diligence 20 plus hours a 22 A. Yeah, I think, I mention it right
23 week," does that refer to the Roaring Kitty? 23 after it. But my text is a little bit hard to
24 A. Yes. 24 see.
25 Q. And on Page 2 under "Act 3, the 25 PS ratio of five, what else does it
28 (Pages 106 - 109)
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2 say? 2 the conservative end or closer to the outlandish
3 Q. "Maybe four with console cycle 3 end?
4 revenue. That wouldn't even be considered a 4 MR. MUHLENDORF: Asked and answered.
5 euphoric price with today's growth stocks." 5 He's answered that a couple of times, I think.
6 And then for comparison, you mention 6 I mean, you can go ahead.
7 a couple of tickers. One of which is Tesla. 7 THE WITNESS: Oh, sorry.
8 A. Yeah. So, In Vidia 22; Tesla at 20 8 A. Can you say that again?
9 and what's the last one? Chewy at 5. So 9 Q. Sure.
10 GameStop at -- 10 So what factors did you believe would
11 (Stenographer Clarification.) 11 contribute to whether or not GME's stock price
12 A. At Chewy, Chewy at 5. 12 was closer to the conservative hundred dollars a
13 So GameStop at 420 would be 4 times 13 share price target or the more outlandish 420
14 cheaper than In Vidia with the same evaluation. 14 price target?
15 So 420 seems -- you know, it even seems 15 A. Like, I make, you know, guesses, but
16 conservative almost. 16 I can't predict how the stock will behave. So,
17 Q. I thought you said that a hundred 17 if it hits a hundred and there begins to show
18 dollars a share for GME was a conservative price 18 some weakness, you can shift your strategy.
19 target? 19 Maybe I'll just allocate a little bit for it in
20 A. A hundred dollars is conservative, 20 case it, you know, increases. If it hits 420,
21 yes. 420 puts GameStop at a price to sell ratio 21 great. Then I'm done, right. That's what I
22 of 5, which compared to like the 0 interest rate 22 expect sort of to happen. But, you know, you
23 phenomenon back in the 20 -- late 2021 -- I'm 23 can't really predict the stock prices. They're
24 sorry, late 2020 still made it cheaper than other 24 just two different targets.
25 expensive stocks so... 25 Q. I think that in your October 2020
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1 ALVAN C. CHOW 1 ALVAN C. CHOW
2 Yeah, it's a spectrum, right. 2 post you mention a price target of 400.
3 Q. Do you recall any kind of discussion 3 Do you know if here you're -- the
4 on social media about, you know, placing GME 4 reference to 420 is because of this joke that we
5 orders for 420 shares or any jokes about 420 5 were talking about earlier, or is there any kind
6 around this time? 6 of math that was rolling up into your increase
7 A. Yes. 7 from 400 to 420?
8 Q. Is that in any way related to your 8 A. Yeah, it's mainly a joke. Although
9 $420 a share price target for GME? 9 it's like a -- it's like reasonable, right. It's
10 A. Yes. 10 only like -- what is it? Half a percent more --
11 Q. Can you elaborate on that? What's 11 sorry, 25 percent more, if I -- yeah.
12 the joke? 12 Q. And you purchased shares and call
13 A. I think Elon Musk sort of popularized 13 options of GME in late 2020, right?
14 this number, 420. It's a reference to, I think, 14 A. Yes.
15 marijuana. Tesla hit this price and people 15 Q. And you made those purchases in a
16 speculated that GameStop would also hit this 16 number of separate accounts, I think, an e-Trade
17 price sort of as a joke. 17 investment account, an e-Trade IRA account, a
18 But if I look at it from a PS ratio, 18 Fidelity Roth IRA account and a Robinhood
19 it's like very very reasonable. 19 account?
20 Q. So going back to this differential 20 A. Yeah.
21 between what you viewed as the conservative 21 Q. And why did you spread those trades
22 hundred dollar a share price target and the 22 across multiple accounts?
23 outlandish $420 a share price target, what 23 A. I don't really know. Maybe like ease
24 factors did you see as contributing to that, to, 24 of use of the brokerages. Retirements, you know,
25 you know, whether or not the price was closer to 25 you can only buy shares. There was -- you know,
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2 some of the brokerages have different option 2 Exhibit 211.
3 prices. Some of them have options commissions. 3 Q. I think it should be available now,
4 I just sort of just -- I don't really know; 4 if you refresh your page.
5 again, multitude of factors. 5 A. Okay. It's loading.
6 MR. MUHLENDORF: Hey, Kathleen, now 6 Q. Do you see it now or is it still
7 that we've gotten through document, can you give 7 loading?
8 us a sense of how much time you've got left or 8 A. I see it.
9 whether we need another break? 9 Q. And can you identify this document?
10 MS. YOUNG: I think I probably have 10 A. This is a video with -- it's a meme,
11 maybe another hour. 11 basically, a video meme.
12 Is now a good time for a break? Do 12 Q. And this is a video that you posted
13 you want to take a break for lunch. 13 on Reddit on Wall Street Bets on January 14,
14 MR. MUHLENDORF: Yeah, for everyone, 14 2021, right?
15 let's take a break. 15 A. Yes.
16 MS. YOUNG: Okay. 16 Q. And it states, "GME End Game," and
17 MR. STERN: And, again, I will need a 17 then there are five rocket ship emojis, right?
18 short break at one just a reminder. 18 A. Yes.
19 MS. YOUNG: Well, maybe we should 19 Q. What do the rocket ship emojis mean?
20 break for like 45 minutes. 20 A. I guess it's in support of the
21 THE VIDEOGRAPHER: Let's go off now 21 company. It signifies like an increase in price.
22 and then you can discuss. 22 Q. And the price of GME stock?
23 The time is 12:34 p.m. This the end 23 A. Yes.
24 of Media 2 and we are going off the record. 24 Q. And what did you mean by "GME End
25 (Lunch recess taken 12:34 to 1:20 25 Game"?
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1 ALVAN C. CHOW 1 ALVAN C. CHOW
2 p.m.) 2 A. Kind of going off the theme of the
3 THE VIDEOGRAPHER: The time is 3 previous post, which was Infinity War. End Game
4 1:20 p.m. This is the beginning of No. 3 and we 4 is the sequel to Marvel's sort of like Mano
5 are on the record. 5 series. So "End Game" is a I'll say reference to
6 Q. Mr. Chow, earlier today, I believe, 6 Marvel.
7 you testified that you began investing in GME 7 Q. So you're tying this back to your
8 around September of 2020; is that right? 8 December 2020 post where you talk about the GME
9 A. I believe so, yes. 9 Avengers?
10 Q. And from the account statements your 10 A. Yes.
11 Counsel produced to us, I believe that you 11 Q. And did you think that you were
12 continued investing in GME call options and 12 reaching some conclusion about the end game of
13 shares of GME throughout the end of the year of 13 GME?
14 2020; is that right? 14 A. You know, I believe around this time,
15 A. Yes. Yes. 15 I think, these three that you see pictured here
16 Q. So now we're going to take a look at 16 Jim Grube, Ryan Cohen and Alan Attal, had joined
17 -- 17 the Board of GameStop and so I thought this was
18 MS. YOUNG: Would you do Tabs 22 and 18 -- you know, at the -- previous to this, Ryan
19 23, Vineet. 19 Cohen was just an investor, right. So we were
20 (Deposition Exhibit 211, Reddit 20 unsure of his involvement in GameStop.
21 thread, was marked for identification.) 21 And we, you know, theorized -- "we"
22 (Deposition Exhibit 212, video clip 22 as, you know, people who were just online and on
23 of "Avengers Endgame" manipulated by Mr. Chow, 23 this string theorized, you know, maybe is he
24 was marked for identification.) 24 going to buy the entire company, is he going to
25 MS. YOUNG: And I think this will be 25 -- you know, what is he going to do? We don't
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2 decrease on January 21st, 2021? 2 A. Okay.
3 A. No, I don't think so. Well, like, 3 MR. MUHLENDORF: The very top.
4 every day, you know, matters a lot, right. At 4 THE WITNESS: Oh. Oh, oh, I see.
5 this point, it's, basically, every hour. If -- 5 MR. MUHLENDORF: There you go.
6 and there's all sorts of things that could 6 A. Okay, we see it.
7 happen. 7 Q. And you see this is an article dated
8 For example, let's say the stock runs 8 January 26, 2021 titled, "GameStop jumps after
9 up to 200 and GameStop decides to do a share 9 hours as Elon Musk tweets out Reddit board that's
10 offering, then it would probably tank a lot. So, 10 hyping stock"?
11 you know, day to day it's like -- it's just 11 A. Yes.
12 impossible or you're just watching it all the 12 Q. And it states in the third bullet,
13 time. You're looking for, basically, every piece 13 "The Tesla CEO tweeted GameStop stonk with I
14 of news, every hint of, like, weakness in the 14 think two exclamation points."
15 stock. You're just watching every thing. It's 15 Did you see this tweet on
16 like -- it's so hard to predict, you know, what 16 January 26th?
17 will actually happen. 17 A. Yes, I did.
18 Q. And why is it that at this time you 18 Q. And did this tweet signal anything to
19 had to watch it this closely or like every hour 19 you?
20 in your -- you know, really matters, as I think 20 A. Yes, it did.
21 that you put it? 21 Q. And what did it signal?
22 A. Oh, yeah. Just cause I thought, you 22 A. To me it signaled the height of the
23 know, there was more and more attention being put 23 mania, which I was very comfortable exiting my
24 towards it, especially after Andrew Left. 24 position at that moment.
25 Q. And "attention" from whom? 25 Q. And what do you mean by "mania"?
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1 ALVAN C. CHOW 1 ALVAN C. CHOW
2 A. Everybody. 2 A. So volatility in, I think, in markets
3 Q. Do you mean investors, people on 3 is rare because for the most part things are
4 social media? 4 priced appropriately and, of course, like over
5 A. Like, everyone on the planet with an 5 time based on the fundamentals, things may
6 Internet connection. 6 change.
7 Q. And did you think that that attention 7 If there is a very large market
8 was contributing to price volatility? 8 moving event maybe similar to like I saw today
9 A. Yes. 9 First Republic, you know, dropping 50 percent in
10 Q. But you didn't have any view as to 10 a day, there needs to be sort of like a marketer,
11 whether or not the price of GME would increase or 11 in my opinion, as a market participant to sort of
12 decrease at that time? 12 signal end of an episode. You know, this is,
13 A. I -- certainly hoped it would. But, 13 typically, for enthusiasm for bull cases. This
14 you know, it would just have to play whatever the 14 is when everyone is at their max optimism. And
15 market gives you. 15 for stocks that are decreasing, it's, typically,
16 MS. YOUNG: Let's look at previously 16 at their max estimates. It's hard to say exactly
17 marked Exhibit 15, Vineet. 17 what those are.
18 (Deposition Exhibit 15, article 18 But Elon Musk is tweeting. That to
19 titled, "GameStop jumps after hours as Elon Musk 19 me was signal. Of course, maybe who knows, maybe
20 tweets out Reddit board that's hyping stock," was 20 Donald Trump could have tweeted and I'd be wrong.
21 previously marked for identification.) 21 But to me, you know, Elon Musk was enough.
22 Q. Okay. I think it should be available 22 Q. And when you say, "end of an
23 now. It will be the first exhibit in the list. 23 episode," what do you mean by that?
24 Because this was previously used at a different 24 A. It's like if you have a thesis on why
25 deposition. 25 your stock is like unappreciated by the market,
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2 you know, there needs to be like a beginning and 2 ALVAN CHOW: "You can see the risk in
3 end point to your thesis. So maybe similar to 3 his name. If the stock went from 10 to 150, you
4 Michael Burry in his mortgage-backed securities, 4 know, then everyone thinks, well, it should go
5 the end point for him was when Bear Stearns went 5 from 150 to 10,000, right? There is no limit.
6 bankrupt. That's when he knew, like, he was able 6 Who knows how high this could go. It
7 to -- like, that's the time to close out his 7 could go to 1,000, 2,000. You don't want to
8 credit default swaps, right. Because if he held 8 overreact or try to steal a ball and risk a foul
9 them, they would be worthless. But there needs 9 in the key movements. You want to be extremely
10 to be a time to trade them, you know. 10 disciplined in everything that you are trained to
11 Q. And, I think, you testified a few 11 do. So I was training myself to look for this
12 moments ago that you think that market volatility 12 moment of euphoria. And then right before after
13 is "rare" because for the most part, you know, 13 hours, Elon tweeted, 'game stonk.'"
14 stocks are priced appropriately. 14 (Playing video concluded.)
15 Does that suggest that, you know, 15 Q. And so this is the Elon Musk tweet
16 during this period of volatility that you did not 16 that we were just looking at, right?
17 think that GME was priced appropriately? 17 A. Yes.
18 MR. STERN: Objection. 18 Q. And you call this the "moment of
19 A. I didn't think GME was priced 19 euphoria"?
20 appropriately, like, late 2020. I thought 20 A. Yes.
21 eventually it would be priced appropriately. 21 Q. Why is it that you were confident
22 Q. And when you mention the end point of 22 that this was an optimal time to sell?
23 your thesis, I think you said, did you view 23 A. Because it's Elon Musk. He's like
24 Elon's tweet as sort of being the end point of 24 the coolest guy.
25 your thesis in when you should exit your 25 Q. And did you think that his tweet
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1 ALVAN C. CHOW 1 ALVAN C. CHOW
2 position? 2 caused the GME stock price to shoot up and so
3 A. In that moment, yes. 3 that --
4 Q. Is that because you didn't think the 4 MR. STERN: Objection. Sorry.
5 stock price would continue to climb after that? 5 Q. You can answer.
6 A. Correct. Personally -- 6 A. Yes.
7 Q. Let's look at -- 7 Q. And that's why you thought that it
8 A. I'm sorry. 8 was the right time to sell?
9 Q. Oh, sorry. Go ahead. I didn't mean 9 A. I don't remember exactly when I sold
10 to interrupt you. 10 but, generally, yes.
11 A. It was more that I was comfortable if 11 MS. YOUNG: Let's look at Tab 24.
12 it did increase. Like, I was comfortable with 12 (Deposition Exhibit 216, video clip
13 that price, right, like. If it went to a 13 labeled, "CNBC Documentary #4.mp4," was marked
14 thousand or whatever, I don't care cause, you 14 for identification.)
15 know, cause that's the end point. So it could 15 MS. YOUNG: And this will be
16 have still gone up, but that's -- it was 16 Exhibit 216, I believe.
17 irrelevant to me. 17 (Playing of video commences.)
18 MS. YOUNG: So let's look at Tab 23. 18 ALVAN CHOW: "When Elon tweeted after
19 (Deposition Exhibit 215, video clip 19 hours, I remember texting my dad. I was like,
20 labeled, "CNBC Documentary #3.mp4," was marked 20 okay, this is the top for sure. So I sold
21 for identification.) 21 everything after he did that. So, by the skin of
22 MS. YOUNG: This will be Exhibit 215. 22 my teeth, I escaped that. I mean, this 8 million
23 Q. I think this is another clip. So 23 is kind of like -- I'm like just eating scraps
24 Vineet can screen share once it's available. 24 that are left over from a massive battle. I
25 (Playing video commences.) 25 think I'm really a small fish in a very crazy
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1 IN RE: JANUARY 2021 SHORT SQUEEZE TRADING LITIGATION
2 4/25/2023 - Alvan C. Chow (#5878015)
3 E R R A T A S H E E T
4 9
PAGE_____ 4
LINE_____ "Ch-Heng" should be
CHANGE________________________
5 Chi-Heng
__________________________________________________
6 Typo
REASON____________________________________________
14 22 "there was an inflict
7 PAGE_____ LINE_____ CHANGE________________________
8 change" should be "there was a change"
__________________________________________________
9 Deponent misspoke
REASON____________________________________________
10 62
PAGE_____ 2-3 CHANGE________________________
LINE_____ "I placed so much high"
11 should be "I placed so much--high"
__________________________________________________
Clarity
12 REASON____________________________________________
13 82
PAGE_____ 20-21CHANGE________________________
LINE_____ "Whom I to direct your
14 investments." should be "Who am I to direct your
__________________________________________________
investments?"
15 Transcription error
REASON____________________________________________
90 13 "while we're here"
16 PAGE_____ LINE_____ CHANGE________________________
17 should be "why we're here"
__________________________________________________
18 Transcription error
REASON____________________________________________
19 91
PAGE_____ 4
LINE_____ "fervor belief" should
CHANGE________________________
20 be "fervent belief"
__________________________________________________
21 Typo
REASON____________________________________________
22
23 ________________________________ _______________
5/25/2023
24 Alvan C. Chow Date
25 [Continued on next page]
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4 97 LINE_____
PAGE_____ "it's a planned" should
14 CHANGE________________________
5 be "it's a play on the"
__________________________________________________
6 Transcription error
REASON____________________________________________
7 11 CHANGE________________________
106 LINE_____
PAGE_____ "bull blockbuster"
8 should be "blockbuster"
__________________________________________________
9 Deponent misspoke
REASON____________________________________________
10 110 LINE_____
PAGE_____ 14 CHANGE________________________
"In Vidia" should be
11 "Nvidia"
__________________________________________________
12 Typo
REASON____________________________________________
13 11
113 LINE_____
PAGE_____ "sorry, 25 percent"
CHANGE________________________
14 should be "sorry, .25 percent"
__________________________________________________
15 Transcription error
REASON____________________________________________
16 4
117 LINE_____
PAGE_____ "Mano" should
CHANGE________________________
17 be "Thanos"
__________________________________________________
18 Transcription error
REASON____________________________________________
19 129 LINE_____
PAGE_____ 10 "like a marketer" should
CHANGE________________________
20 be "like a marker"
__________________________________________________
21 Transcription error
REASON____________________________________________
22
23 ________________________________ _______________
5/25/2023
24 Alvan C. Chow Date
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2 4/25/2023 - Alvan C. Chow (#5878015)
3 ACKNOWLEDGEMENT OF DEPONENT
4 I, Alvan C. Chow, do hereby declare that I
5 have read the foregoing transcript, I have made any
6 corrections, additions, or changes I deemed necessary as
7 noted above to be appended hereto, and that the same is
8 a true, correct and complete transcript of the testimony
9 given by me.
10
11 ______________________________ ________________
5/25/2023
12 Alvan C. Chow Date
13 *If notary is required
14 SUBSCRIBED AND SWORN TO BEFORE ME THIS
15 ______ DAY OF ________________, 20___.
16
17
18 __________________________
19 NOTARY PUBLIC
20
21
22
23
24
25
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