The inevitability of the "Mother of All Short Squeezes" (MOASS) is a conclusion that cannot be drawn with certainty. While the concept of a short squeeze, where a large group of investors buying a stock drives up its price, is theoretically possible, the factors that contribute to its occurrence are complex and difficult to predict.
- Theoretical Possibility: Theoretically, a MOASS can occur if a large number of investors simultaneously buy a stock, leading to a rapid increase in its price1. This has been demonstrated in the past, such as with the GameStop (GME) saga in 20211.
- Challenges to Prediction: In practice, however, predicting and orchestrating a MOASS is challenging. The belief in the inevitability of MOASS may stem from the desire for a repeat of past events, but market conditions and investor sentiment are constantly evolving, making it difficult to predict when and where a short squeeze will occur2.
- Market Dynamics: The power dynamics in the market have shifted, with retail investors increasingly challenging institutional investors and hedge funds3. This has created an environment where a MOASS could theoretically occur, but it does not guarantee that it will.
- Specific to GameStop (GME): GameStop's recent stock split, which increased the number of shares outstanding, does not automatically lead to a MOASS4. The split makes the stock more accessible to a broader range of investors but does not directly trigger a short squeeze.
- Investor Behavior: The success of a MOASS depends on the collective action of a large number of investors, which is difficult to coordinate and predict5. The belief in the inevitability of MOASS may be driven by sentiment and speculation, but it is not a reliable indicator of future market movements.
- Conclusion: While the concept of a MOASS is intriguing, it is not inevitable. The occurrence of a short squeeze is influenced by a complex interplay of market conditions, investor behavior, and random events that make it difficult to predict with certainty. Investors should focus on thorough research and risk assessment rather than relying on the belief that a MOASS will happen.