The United States Oil Fund dropped more than 15% on Monday after it announced its latest structural change in a desperate attempt to stay above water. With losses mounting in the fund, which trades under the ticker ‘USO’ and is popular with retail investors, Jim Cramer said he wishes investors “the best of luck.”

On Monday USCF, the fund’s administrator, said that over the next three days the USO will sell all of its West Texas Intermediate contracts for June delivery, in favor of longer-term contracts. The fund’s rough breakdown will now be as follows: 30% July contract, 15% August contract, 15% September contract, 15% October contract, 15% December contract and 10% in the June 2021 contract.

Over the last week the fund has announced a number of structural changes, with each one increasing its exposure to longer-dated contracts. The fund, which has dropped more than 50% in the last month and currently trades at $2.17, is trying to limit its exposure to the nearest West Texas Intermediate contract as oil prices continue to plunge.

But each change has taken the fund further away from its initial mandate, which was to track the near-term price of oil. According to a filing the changes are in response to “regulatory requirements, current market conditions and risk mitigation measures imposed by USO’s FCM [futures commission merchant].” 

On Monday the WTI contract for June delivery dropped more than 25%

‘Bury these people’

The fund has attracted record inflows from retail investors looking to profit from a rebound in oil prices, but experts warn that commodity-focused ETFs should not be purchased by those who do not fully understand dynamics in the futures market. 

“There are times in life where people know that there’s an instrument that is faulty, and they can shoot against that instrument and bury these people,” CNBC’s Jim Cramer said Monday. 

“There is this financial problem: people who are buying the USO they are financial people so if you’re a real person or you’re a large contractor, a large player … they can wipe out the USO. And I think that’s been what’s going on. It’s not a conspiracy, it’s a reality. When you have an organization that can’t take delivery, well you should crush that organization every time, and that’s what probably happened,” he added.

Last Monday WTI plunged into negative territory for the first time in history as holders of the contract for May delivery — which was set to expire the next day — scrambled to sell their contract.

But with oil demand not expected to recover anytime soon, and with nowhere to store oil, there was no buyer on the other side. In the end, the contract holders had to pay to have it taken off their hands. The USO had most likely rolled out of the May contract before last week’s plunge into negative territory, but the drop rippled throughout the commodities market and also sent longer-dated contracts lower.

Hedge funds betting against the USO have already more than doubled their money.

According to data from S3 Partners, from Feb. 27 to April 21 “short sellers went into overdrive.” The firm said that over the two-month period short sellers tripled their positions in the USO, ultimately pocketing around $286 million for a 110% return through Tuesday.

On Wednesday USO announced an 8-for-1 reverse stock split in a bid to inflate its stock price. This reduces the number of shares outstanding, which in theory leads to a higher stock price. A reverse stock split does not change any of the fund’s underlying fundamentals.

“The people in the USO are naive. They’re rookies, and I wish them the best of luck,” Cramer said.

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