Draft:MOASS

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Some dare call it
Conspiracy
Icon conspiracy.svg
What THEY don't want
you to know!
Sheeple wakers

MOASS, short for "The Mother of All Short Squeezes," is a conspiracy theory born out of the 2021 GameStop short squeeze, a process under which the stock price of so-called "meme stocks" like GameStop, AMC Theatres, BlackBerry, Nokia and Bed Bath & Beyond soared to astronomical highs in January 2021 before crashing down again.

The TL;DR version is this: investors who bought the stock too late and saw the price go back down claimed to have found an infinite money glitch and that they could find a way to not only recreate the events of the 2021 squeeze, but push it to a height where everyone could become billionaires by having the Federal Reserve print an enormous, hyperinflationist amount of new money, causing an economic collapse so massive it would destroy the financial system of the entire world.

Confused? It doesn't get any better when you get into the actual "mechanics" of how it's supposed to work. Much of the entire process is documented in Dan Olson's YouTube video "This Is Financial Advice."

What really happened[edit]

During the height of the COVID-19 pandemic in 2020, brick-and-mortar retailers, all staggering under the long-described "retail apocalypse", found their straits even more dire. Many Wall Street firms shorted the stock of such companies, predicting that they would likely not recover and cease to exist. One particular hedge fund, Melvin Capital, put an especially aggressive short against video game retailer GameStop, which due to continual rehypothecation and changing hands many times in short sales, had accrued a short interest of 140%.

A growing number of average people, COVID stimulus funds in hand and drawn to the appeal of the Reddit board "Wall Street Bets" and trading app Robinhood, which allowed people limited margin accounts (treating them like funds they deposited were already there even when they weren't) for buying stocks, and wanting to do something "for the lulz", decided to start buying up stocks of companies considered irrelevant and/or on the brink of collapse, such as GameStop, AMC Theatres, BlackBerry, Nokia and Bed Bath & Beyond.

In January 2021, this craze suddenly accelerated, as many retail investors, caught up in a FOMO fervor and wanting to cash in before it was too late, started piling in. This led to a "short squeeze," where short sellers are "squeezed out" of their positions because of rising stock prices in the companies they are shorting. Short hedge funds, especially Melvin, began closing out their positions to eat staggering losses, but many retail investors fueled a massive price increase. By January 28, GameStop stock, which had been trading at $20 a share, was now just under $500.

That same day, Robinhood turned off the buy button on these meme stocks, changing them to "sell only." The reason was because Robinhood did not have enough credit or cash to support all these buys and needed to maintain some kind of reserve. Over the next few days, the prices of these stocks began falling back.

Congressional and SEC inquiries were held over these events, particularly whether YouTube and social media influencers encouraging buying these stocks did a pump-and-dump scheme to manipulate these prices. In the end, these people were effectively let off the hook, finding no willful wrongdoing, and it was concluded that a confluence of various factors that led to the squeeze. Melvin Capital ended up going under in 2022. The meme companies used the stock windfall to their advantage, or at least tried to, using that infusion of investments to attempt turnaround strategies, all with varying degrees of success. Prices, however, for these companies fell considerably back to the pre-2021 lows, and in some cases, even lower. Bed Bath & Beyond ended up filing for Chapter 11 bankruptcy protection in April 2023.

The conspiracy theory[edit]

Many retail investors bought these stocks well into their climb, at prices where they'd never make profit unless it kept climbing. When that didn't happen, a fair number of them started retroactively cooking up a new justification for the entire squeeze, as well as why the price fell.

Under the new thinking, buying these stocks was a way to take revenge for the Great Recession, and Wall Street hedge funds were deliberately killing companies off through naked short selling, a real and very illegal strategy of selling stock short without borrowing the actual stock first; that naked shorting creates "fake shares" that depress stock prices, and that these hedge funds pile on billions of dollars in debt to create short positions. The thinking is that if prices went up and hedgies had to close their position with "more shares than actually exist," they'd go under. So hedge funds leaned on Robinhood to disable the buy button to kill the squeeze, and then Robinhood CEO Vlad Tenev and various hedge fund managers lied to Congress about it.

Going even further, the investors, calling themselves "Apes" in reference to Planet of the Apes (mainly because their other nicknames are decidedly un-PC), then declared the squeeze wasn't over, that a bigger one, the so-called "Mother of All Short Squeezes", lay around the corner. That they could ride the prices of these companies to "phone number prices", put the hedge funds underwater, and then hold them hostage by refusing to sell the shares. By doing so, an economic apocalypse would be unleashed by which the entire financial system buckles under. And that somehow, the American government would make Apes whole by printing enough money to pay them their supposed billions of dollars due for their shares, something which would of course kill the very purpose of doing so because the dollar would be completely worthless. And then these Apes could become god kings of a New World Order bent to their whims.

In short, the theory is one that depends on extremely convoluted logic, an utter failure to grasp basic economics or math, and relying on a very specific set of circumstances to occur. And yet, when the prices of these companies failed to go back up, when turnarounds failed and the companies once again faltered, and when Apes' holdings kept losing them considerable money, they doubled down. They found, and still find, ways to rationalize everything and claim that victory is imminent. They piled even more money into these stocks, losing even more. Some people have lost their life savings, their homes, their families as a result of their decisions to gamble so recklessly.

Meanwhile, hedge funds have been doing considerably well since January 2021.