Author: Mario Chow @ IOSG

Three Meme coins priced in tokenized stocks can illustrate who truly controls a short squeeze. Data is as of September 7, 2026, 02:15 UTC. Research discussion, not investment advice. See the chart in the English version.

Abstract

In January 2021, retail investors managed to force the short sellers of GameStop into a corner because the circulating supply was fixed, and short sellers could not create more shares to cover. Ultimately, it was Robinhood's decision to shut down the buy button that ended the event.

Five years later, Robinhood’s own chain has launched a batch of Meme coins, not priced in USD, but in tokenized stocks of real public companies. $BONER is priced using Hims & Hers, $MEME is priced using AMC, and $AI is priced using Nvidia. The narrative continues to be about short squeezing: buy the coins up, drive the price of the tokenized stock higher, forcing the institution maintaining the peg to buy real stock in the secondary market.

We have replicated the entire minting and burning records for all tokenized stocks on this chain. To sum it up:

The on-chain price can indeed be pushed up quickly. However, the issuer will soon correct it back, usually not lasting more than a morning.

Here are four specific findings.

The money did indeed reach New York. During that weekend with AMC, Robinhood's issuing agent bought and held about $7.6 million of real AMC stock in the secondary market, accounting for 7.6% of the pre-market trading volume at its busiest time. Therefore, it is incorrect to say that this system has no connection to real market people.

However, the circulating supply is now alive, which disrupts the logic of controlling the market. The same agent increased the supply of tokenized AMC by 19 times in three days, from 152,106 shares to 2,895,758 shares. Hims saw its amount rise from 468 shares to 130,876 shares. The issuer continuously mints under your feet; you cannot lock any volume. In 2021, Robinhood did not allow retail investors to buy; in 2026, it opened up sales and made a profit from price differences. This defensive setup is much more effective.

So what was obtained was a needle, not a short squeeze. This needle is significant: AMC pre-market peaked at +22%, Farmmi intra-day at +321%, and both basically returned to their previous levels within a week. A short squeeze can be sustained because buybacks will force more buybacks. Both times fell back because the mechanism responsible for transmitting capital will inherently shut itself down.

Another almost uncalculated magnitude issue. Even pinning down the cheapest targets, to truly create a short squeeze requires a Meme coin worth $3.4 billion, thirteen times the largest project in this chain's history, resulting in about a 9% increase.

It must also clarify what exactly is being purchased with these coins. It is not the company’s exposure. What these coins are truly pricing is whether the company will notice you. The most significant price movement throughout was triggered by a CEO's post on Thursday evening, and Adam Aron’s attitude at the time was not friendly: he called the tokens disgusting and mentioned hiring a securities lawyer. The tokens still managed to shoot up to seven times the stock price overnight. The real return here is corporate attention, and whether that attention is friendly or hostile, it pays. The short squeeze is the return advertised; that arithmetic could never reach.

The truly valuable asset on this tokenized stock chain is not Meme coins or issuing platforms, but the subscription and redemption channel. That is a whitelist.

The Weekend When AMC Came Back

On Thursday, September 3, at 5:18 PM New York time, 78 minutes after closing, AMC's CEO Adam Aron posted that Robinhood's tokenized AMC is “despicable, absurd, and disgusting,” and stated that he has hired external securities lawyers.

Crypto Twitter saw something else. Within six hours, two Meme coins named after this tweet, $CINEMA and $MEME, began trading in a pool priced in tokenized AMC. The NYSE had already closed. The theoretically correct token equivalent to one AMC share shot up to $18.04.

The real stock price that day closed at $2.54. Seven times, overnight. The target was still a company whose entire investment logic was “surviving the last wave of enthusiasm.”

The next day's opening, the price difference disappeared, but the process was not what most people thought. This stock surged to $3.11 in the first 15 minutes of pre-market trading, up 22%, and then slid back, closing at $2.65. Section 6 will analyze this segment. The easiest part to misinterpret in this whole event is this one hour.

That is why the AMC case is useful. All the things that short squeeze theory says should happen indeed happened: real Meme stock codes, real CEO, real crowd, real decoupling, and real buy orders hitting the market. However, the stock ultimately returned to where it was a week ago.

Stock Tokens on Robinhood

Three things need to be introduced first, as they did not exist eighteen months ago.

Robinhood Chain is a public chain operated by Robinhood. The one hundred most active pools rotate about $1.65 billion daily, the vast majority being ordinary crypto assets.

Stock tokens are issued by Robinhood Assets (Jersey) Limited and track individual US stocks. Legally, they are not stocks but debt certificates, giving you the economic return of one share, with real stocks held by a brokerage custodian. Practically, one token represents one share's exposure, and licensed intermediary institutions (Authorized Participants, APs) can subscribe and redeem at fair value. It operates under the same mechanism as ETFs.

The issuing platform refers to sites like long.xyz, where anyone can deploy a Meme coin and a trading pool with one click. The pricing asset changed in August: formerly, Meme coins were priced in USD; now, they are priced using tokenized stocks. You are not using USD to buy $BONER; you are using tokenized Hims & Hers to buy.

This replacement is where the whole story lies because it means buying Meme coins is equivalent to buying stocks. Your $ETH, $USDG will be exchanged for stock tokens on the way in, causing the pool to continuously accumulate stocks, with transaction fees settling in stocks rather than cash. A group of Meme coin buyers effectively becomes a buying force for a public company’s stock.

Currently, there are seven such stock-priced pools among the one hundred most active across the entire chain, totaling about $73 million in daily transactions. This is no longer a niche play.

There is a number worth remembering, as most subsequent questions can be explained by it: on this chain, all tokenized stocks combined have about $138 million of real stock backing them across fifty targets. For one AMC stock alone, the transaction volume on Nasdaq last Friday was about $150 million. The entire on-chain stock market cannot match a busy afternoon of a mid-cap stock.

Comparison with GameStop and Where It Fails

The concept of short squeezing was initially explained based on GameStop, so let's accurately recount 2021.

GameStop succeeded due to a hard constraint: the number of shares sold short was approximately 138% of the circulating supply, meaning more stocks were borrowed and sold than existed in the market. Retail investors held on to their purchases, leaving short sellers with no place to cover, and the stock price soared from $17 to $483 intraday on January 28. It ultimately ended when brokers restricted buying, with Robinhood being the most well-known among them, triggered by a $3 billion additional margin call from the clearinghouse. The circulating supply was fixed, and everyone’s only leverage was shutting the door.

The same scene plays out on the Robinhood Chain.

When tokenized AMC surged to seven times the stock price, Robinhood's issuing agent did not shut the door. They went out and purchased real AMC shares, placed them into custody, and then issued more tokens accordingly. Within three days, they created 3.05 million shares, redeemed and destroyed 310,000 shares, and the tokenized circulating supply jumped from 152,106 shares to 2,895,758 shares. Seventy-two hours, nineteen times.

Hims tells the same story, just at a slower pace. When $BONER launched on August 20, there were only 468 tokenized Hims shares on Robinhood Chain; now it is 130,876 shares, expanded by 280 times, corresponding to about $3.6 million of real Hims & Hers bought and held. On September 3, we measured it: in four days, $BONER's share of the tokenized supply dropped from 81% to 47%, while the actual number of tokens held increased. It didn’t drop the volume; it was diluted all around it.

However, this must be clarified. The subscription and redemption channel was not created to prevent short squeezes. Its purpose is to keep the tokens aligned with the stocks, which is exactly the whole reason for holding tokenized stocks rather than Meme coins; it is the same machinery used by all ETFs. It does not create manipulation, but rather a mechanism doing its job effectively. Furthermore, the result is much better than the time when trading was halted in 2021 because no one is kept from selling.

What Buyers of Meme Coins Are Actually Betting On

Let’s walk through the chain from the side of retail investors. The first half holds up; skipping it would be dishonest.

You buy $MEME with USD. The router converts USD to stablecoins, then to tokenized AMC, and finally to Meme coins. Your money, on the way in, is literally the buyer’s order for the tokenized stock. The more people buy, the higher the token price goes above the real stock price, creating a premium that the AP can profit from: they buy real AMC on the NYSE, give it to the custodian, receive newly minted tokens, and then sell into the pool at the premium price.

The core judgement by retail investors is correct. The money from the crowd did indeed hit the market in New York in the form of legitimate buying. This isn’t speculation; it was $7.6 million of AMC over one weekend, with 7.6% of the pre-market trading volume at its busiest.

Next, the so-called "flywheel" narrative will add another circle: forced buying pushes the stock price up, the rising price validates the narrative, more people rush in to buy coins, and the AP has to buy more. This is the most ideal script, and it will break down at three points.

The first is that the volume is too small. $7.6 million, facing a stock with a daily transaction of $150 million. In stable conditions, an AP's footprint might only represent a thousandth of the transaction volume.

The second fatal point: this mechanism will shut itself down. The purpose of AP's buying is to eliminate premiums; once the premium disappears, the reason to buy also vanishes. It is shut down by its own success.

The third is that it is reversible. Redemption works backward from subscriptions; when the crowd disperses, the AP sells the same batch of stocks back into the market.

Putting these three together, the question becomes what has actually changed from 2021 to now. The answer emerges. Furthermore, it is not related to scale.

GameStop is positive feedback: every forced buyback pushes the price slightly higher, coaxing the next short seller to cover. The cycle feeds itself. The definition of a short squeeze is exactly this.

The subscription and redemption mechanism is a design of negative feedback: arbitrageurs' buying merely aims to neutralize the price difference that brought it about, so it both functions and disappears at the same time. An active circulating supply can indeed get your money onto the board, but it is a brake, never an accelerator.

A dead circulating supply turns buying pressure into a spiral, while an active circulating supply turns the same buying pressure into a shock cost that fades. Both can push stock prices, but only one can push and hold.

To put it more plainly, the most important point to remember from the text is:A group of people can indeed raise the on-chain price quickly. What they cannot do is keep it there, because as soon as the stock market opens, the AP will fill in the gaps. The ceiling does not depend on how large the crowd is; it depends on how many hours remain before the channel reopens.

The one thing the issuer cannot produce is time. This point will be discussed in Section 7.

Who’s Sitting at the Table

Do not view it as a machine; first ask who sits at the table, what money each seat makes, and it’s much easier to assess.

There is a line worth stating directly: Authorized Participants are the most stable earners at this table. They create tokens at fair value, sell into the premium created by the crowd, and wait for the crowd to disperse to buy them back. During AMC’s weekend, they bought and held about $7.6 million of real stock at their chosen price, facing a market willing to pay seven times fair value. There is no wrongdoing here. This is a role with proper consideration, and it is this consideration that makes people willing to do this at four in the morning. The reason the peg holds is that there is money to be made from this transaction. What matters to us is one thing: where does sustainable profit lie? It lies here, not in the issuing platforms, nor in the coins.

Comparison with GameStop and Where It Fails

This is not about “is this a short squeeze,” but rather: whether the pricing asset can be subscribed to and redeemed.

Everything else follows from this, as it determines whether the premium is a decoupling that will be wiped out or if it simply becomes the price of another asset.

Real Robinhood stock tokens have a prospectus from Jersey, a custodian holding real stocks, each target has its series and ISIN code, and there is a whitelist allowing subscriptions. On the block explorer, its name ends with • Robinhood Token, and the exchange rate field has a value.

Fake tokens require just 63 lines of Solidity and about $400 of gas. Fixed supply, no issuer, no oracle; the so-called endorsements state “an operational obligation of the issuer,” meaning nothing on-chain can verify it, nor can it.

The two look identical on the block explorer, are quoted the same on the same platform, and displayed in the same wallets. The only difference lies in a field that can be empty.

So has it pushed real stock prices at all?

This section must be detailed because merely looking at closing prices makes skepticism seem too easy. Based on the closing price, AMC rose 4.3% that day, seemingly nothing happened. But if calculating from the last price before the event to the highest price and including pre- and post-market, it tells a different story.

So the honest statement is not “Meme coins failed to push stock prices,” but rather:They pushed very aggressively but never held it.

Pre-market on September 4 offers the clearest insight into how this mechanism operates, worthy of analyzing minute by minute. Compare the on-chain prices with the Nasdaq pre-market quotes, not with the previous day's closing price: at 4:00 AM New York time, the token was at $4.09, while the last real stock price was $2.54, a 61% gap. Fifteen minutes later, propelled by 8.35 million shares in pre-market trading, the stock reported $3.11, while tokens were already declining. About half of this convergence came from the stock price moving towards the token, not the token falling back to the stock price. This is precisely the transmission that the positive feedback narrative predicts.

Then it stopped. By 9:29 AM EST, the stock had fallen back to $2.62, tokens at $2.61. The buying pressure that had emerged at four had no second round behind it, as the premium it chased had disappeared. The stock ultimately closed at $2.65.

Look at the three events in their respective histories: AMC traded 57.2 million shares that Friday, 1.9 times its usual volume, only ranking fifteenth in the past six months; on July 20, AMC traded 186.8 million shares, which had nothing to do with Meme coins. Hims' trading volume has not left its normal range. Farmmi, on the other hand, traded 872.6 million shares on September 2, vastly exceeding its regular volume of 45,000 shares, about 19,000 times more.

This model is exactly the opposite of intuition. The time when the on-chain venue has the most impact on the market was precisely when the companies were so small that the on-chain crowd represented almost its entire market, and this situation only occurs when the pricing asset is fabricated, because Robinhood does not provide tokenization for companies below a billion dollars in market cap. The two genuine tokens correspond to companies too big for $3.6 million or $7.6 million in buying to uphold the price.

As for the fate of these Meme coins, it is entirely unrelated to what has been mentioned above: $CINEMA ignited the fire for AMC and has now fallen 93%. $MEME came in late, capitalizing on the crowd, currently valued at $102 million. $JINQIAN is listed on the only stock that has been genuinely pushed and is down 98%. They are attention assets; the companies printed on their labels are just decorations.

The True Weakness Lies in the Weekend, Where On-Chain Short Squeezes May Occur

The real structural weakness lies not on the stock side, but on subscription channels that operate during New York office hours while tokens trade 24 hours.

This can now be seen in real time. As I write this, the last supply addition for any stock token on Robinhood (AMC, Hims, GameStop, Nvidia, SPY) took place on September 4, Friday, at 23:35 UTC, 50 hours ago. Monday is Labor Day; the channel won't reopen until Tuesday pre-market, leaving an 80-hour window: tokens trade routinely, but no one can create an additional one.

Cross-referencing this with Section 3, previous conclusions need to be narrowed down. Earlier arguments claimed that short squeezes are impossible because the circulating supply is alive. But in this window, the circulating supply is not alive; it is dead. For a full three days, the supply of tokenized AMC was as fixed as GameStop’s stock capital in 2021, with no arbitrageur able to touch it regardless of how much money they spent.

Thus, the honest conclusion is narrower than “nothing can be squeezed here.” Listed stocks cannot be squeezed through this channel, as detailed in Section 3. But tokens can indeed be squeezed, and only during closed trading windows. This is not hypothetical: $18.04 for $2.54 is how it came about, and the +51% closing of tokenized Hims we measured in August also came about in this manner. The short squeeze at the token level is a real, recurring phenomenon on this chain, driven by the calendar.

Then there is an obvious question: why isn’t it happening now?

It is indeed not occurring, and the reasons are critical. Throughout the weekend, tokenized Hims fluctuated between -2% and +4%, now resting at +2.9%. During most of the time, tokenized AMC traded at a discount, dipping down to -7%. Both combined for about $40 million in trading, with the peg not loosening.

Returning to the earlier point about the nineteen times. After the panic, the issuer did not pull back on supply, so the currently frozen volume is deep: 2,895,758 shares, rather than 152,106 shares. A thin circulating supply has always been a necessary condition, and a closed market merely amplifies it. AP used three days of excess supply to prematurely detonate the fuse for the next three days. For an incident that was unintentional, this is quite impressive.

For those holding these types of tokens, the practical reading is: The risk factor is the calendar, not the company. Long weekends, public holidays, and a cold target that hasn't seen additions recently, when these three come together, the relationship between the on-chain price and the real stock price is weakest.

Stress Test: How Big Must It Be to Work?

This is not a plan, but a scale to measure how far this mechanism is from being “effective.” First, let’s clarify two terms, as the entire argument hinges on them.

Short interest refers to the number of shares borrowed and sold short, where sellers bet the price will fall. These shares must be bought back eventually. This is fuel.

Short covering days represent short interest divided by average daily trading volume: if shorts are the only buyers in the market, how many normal trading days are required to buy everything back. This is the fuse. A high number indicates that shorts are trapped, with normal trading volume insufficient for them to exit without raising prices; a low number means they can walk out slowly through the front door.

GameStop's short sales exceeded the available inventory, making any normal trading volume inadequate to cover all positions, which caused the price to skyrocket. The short covering days for this batch of tokenized assets lie between 3 and 9. Everyone can easily exit.

Thus, the ceiling is set: even if all shorts of these assets were to cover simultaneously, the price increase would only be 7% to 14%. None could double.

Let’s add a couple more figures. The conversion rate of the channel: $BONER peaked at about $85 million, forcing about $3.6 million of real Hims stock purchase and custody, which translates to about 4 cents of forced buying for every $1 of Meme coin market value. The cost: to push the stock price to the extent of a full short squeeze, the channel would have to buy nearly the entire short position.

To provide a scale: the largest Meme coin in the history of this chain is $AI, at $270 million. The lowest threshold on the inside requires thirteen times that, creating around a 9% increase.

There are also no small stocks to choose from. The smallest company tokenized by Robinhood is NuScale, at $951 million, three orders of magnitude higher than Farmmi. This barrier is not coincidental: the existence of fake tokens is because of it, and the safety of real tokens is also due to it.

Under What Circumstances Would We Change Our Judgement

Robinhood lowers the market cap threshold or allows truly small companies to issue series. The entire safety margin lies in the fact that none of the assets that can be squeezed have been tokenized.

Another authorized participant emerges or the existing one speeds up. Today's premium ceiling is determined by how long the channel is closed. A 24/7 subscription channel would eliminate the last vestiges of decoupling; slower or narrower channels would amplify it.

The US stock market shifts to 24-hour trading, erasing price differences during non-trading hours.

A lesser-known asset encounters a long weekend. The loophole discussed in Section 7 is now dormant, as supply has increased, not because someone fixed it. A recently launched or rarely supplemented token that coincides with a public holiday market closure would restore the attributes of 2021.

Fabricated pricing assets shift from being exceptions to becoming norms. Within a week, two clone contracts have aligned their stock capital to five significant digits, with one counterfeiting code already sneaking into the most active sessions across the chain. This diffusion does not require any approval from anyone.

What We Take Away from This

The throat of tokenized stocks is the subscription and redemption channel, not the trading venues. Downstream entities, issuing platforms, Meme coins, and liquidity pools can all be substituted and will eventually attract no profits. The irreplaceable seat is the one that holds the issuance license, custody relationships, and AP whitelist simultaneously. If we want exposure in tokenized stocks, it lies here.

The discipline of the premium comes from a properly functioning primary market; this is an old lesson of ETFs, and it has been reiterated within a week on-chain. The median premium for tokenized Hims is less than 1% because more can be minted anytime. The fabricated FAMI token has no such underpinning, hence its premium does not converge but directly drops to a 10% discount and continues to decline. Identical curves with opposing mechanisms present completely different risks.

Fabricated pricing assets are the next regulatory flashpoint, and they are the real investor protection issue here. Tokens that mimic a company’s entire equity but hold nothing behind them, do not name an issuer, and are sold alongside genuine securities to retail investors are not fringe cases; they have appeared twice and are spreading. For $400, anyone can create one, and they are indistinguishable from real ones on any consumer-level interface. This point is worth discussing with Molly to see if we want to elaborate further.

This also changes what these coins truly are. They are not a leveraged exposure of a publicly traded company. During trading hours, the underlying asset can only explain 1% of this coin's fluctuations, with little to do with the company. They are closer to a bet on corporate attention: whether the CEO will notice, whether the company will respond, whether the code will get swept into a story significant enough for headquarters to make a statement. This bet has been won. Aron’s post was the starting point of the most significant price movement in this article, and the CEO of Hims & Hers also followed the $BONER account. Neither person is endorsing anyone, yet the attention has indeed paid.

A short squeeze is another leg. It is the one that was sold and also the one that does not stand. Buyers of these coins should at least be clear about which one they are truly betting long on.

Lastly, there is a framework worth retaining. A short squeeze is not about “prices rising a lot,” but rather “momentum that feeds itself.” Tokenization makes the circulating supply active, thus converting the spirals that should have formed into a shock cost that fades, real, measurable, and ending well before noon. The characteristic that could make tokenized stocks good infrastructure is precisely that characteristic that prevents them from being squeezed. This is a good outcome for Robinhood, an expensive lesson for everyone who bought into this narrative, and also reminds us: the focus should be on the issuing layer, not the trading layer built on top of it.

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