The “GME Moass” is an event that is speculated to take place sometime in the future. Before continuing and reading on, it is important to note all information here is speculation and nothing is financial advice.
Important details
First lets break down the term “GME Moass”.
GME is a reference to GameStop, the video game retailer. “GME” is actually the the stock symbol name for GameStop. If you wanted to buy shares of GameStop or simply look up the price, you would begin by search for “GME” in the ticker symbol field.
Moass stands for “Mother of all short squeeze”. A short squeeze is a rare but not unheard of event where a price of a stock rises rapidly.
There are many ways you can make money in the stock market. The most common or most popular is to simply “buy low and sell high”. But you can also make money by betting against a company. For example, if company XYZ has a stock price of $100, but you are very sure that in a few months that stock will go down to $50, you can borrow as much stock as you can at the current price of $100, sell it, then essentially buy it at $50 when it goes down, then return the borrowed stock.
Essentially that is one of the strategies that some financial groups such as hedge funds do to make money. Now if you had the capability to borrow millions or billions of stock and sell it at the current $100 price with the intention of re-buying all those stocks when it goes to $50, you would literally make hundreds of millions or even hundreds of billions in profit.
Sometimes, groups such as hedge funds do everything they can to make sure they can “drive” the price down to where they need to after borrowing this stock. The bigger goal however, if at all possible, is to drive the price down even lower until the company in question goes bankrupt. When this happens, the stock does not ever have to be bought. This is known as “cellar boxing” This post from 2004 reveals how the strategy works.
Now, the GME Moass
The GME Moass refers to the situation at hand that will happen with GameStop. There is speculation that billions of shares that should not exist were created and sold. Instead of the GameStop being cellar boxed (as described above), the opposite happened.
Investors bought more and more stock of this company with many theorizing all available stock should have been bought multiple times at least.
If the supply vs demand in a free stock market would work as intended, the price should have caused GameStop stock price to increase, but it didnt. There are stories that a GME moass already occured but it hasn’t.
At some point investors realized the only way their shares can be totally safe is by direct registering their shares with Computershare, whom is the transfer agent for GameStop. One possible way for GME moass to happen is when all the shares for GameStop get direct registered.
How high can the price go with GME moass?
In theory, the price can be infinite. Literally, infinite. Hundreds, thousands, hundreds of thousands, millions, is all theoretically possible. It is speculated that a financial black hole was created in a sense. Instead of stopping and “taking their loss”, some financial groups may have done the opposite and created more and more fake shares.
A different way to see it
Imagine you are the #1 ranked racer in the world, and you hold the world championship title. You start the race but end up beginning to lose against the underdog. Being that you are the one who organized the race, you begin to make up new rules along the way, lets say you declare the race wont end until everyone crosses the finish line, so therefore you end up driving the opposite way and basically never cross the finish line. The race will never technically stop and you technically never lose, you still keep your title for infinity.
The Mother of all short squeezes aka GME Moass
People believe this GME moass event will be the greatest transfer of wealth in history. With multiple hedge funds collapsing and more to come, nobody knows exactly when this even will take place. What is known, is that some individuals have pledge to keep a portion of their shares directly registered and never selling. This is known as the “infinity pool”.
The price increase could be rapid or slow, over a period of days, weeks, months, or years. What is a fact however, is that nothing of this magnitude has happened before. So many new rules and changes are being commented on and implemented.
Who knew that 1 single stock would have the potential to forever change the outdated rules of the stock market. It is up to you to do your research. You can start by checking out the main timeline and taking a look at some of the events that have transpired up to date.
A video explanation on how this is possible below.
