It's possible in theory, but very unlikely in practice.
A short squeeze is a very temporary event. Once it's over, the share price will begin to decline quickly. Anyone left holding shares on the way down will lose their money. Moreover, if they only joined to squeeze the shorts, they'll lose their purpose. Despite what the memes say, they'll absolutely start selling when it looks like there isn't any more money to be made.
WSB presents an extremely over-simplified version of the stock market. They look at graphs of short interest and assume that no new short positions have been opened since this started. In reality, hedge funds are likely closing and opening short positions all day, every day. They're trying to push the idea that total short interest is a valid indicator of when the squeeze has started, but it's not valid at all.
Frankly, the level of misinformation coming out of WSB can no longer be attributed to Redditors having fun making memes. They deliberately remove comments and accounts that don't toe the line or pump the stock. They deliberately push flawed ideas to convince newcomers to buy more shares. They're pumping the stock, and the early GME buyers will take advantage of the pump by dumping their shares. It's basically a pump-and-dump at this point.
What you've said is great. I'd just like to add that the idea that Reddit is holding strong is actually wrong already. Although all over the net you only see people posting about HODL and [rocket emoji] [rocket emoji] GME to infinity!!!!!, in reality many retail investors have been exiting positions and quietly taking their profits. I suspect that many are early investors who run with their money and then just don't post about it to avoid being ostracized for "squeezebreaking."
Matt Levine saw the Citadel order flow (so Robinhood investors' orders) over the past week[1] and, contrary to what you'd expect, there were only more net buy orders than sell orders on Monday. Every other day, there were more sells than buys, to end the week overall at about a 1:1 ratio.
What to make of this? I think that this is pretty clear indication that early WSBers (who got in at sub-100) are smartly taking their profits and running. What we're going to see at the end of the day is a pretty significant wealth transfer, but unlike what the news is parroting, it is going to be a wealth transfer from the starry-eyed lowest rungs of society to the upper-middle class and large institutions who have gone long on GME. When those driving the narrative on WSB and the Wall Street trading desks exit, the mom and pops who heard about this on the morning news and got in at 200+ are going to be left holding the bag.
It's possible in theory, but very unlikely in practice.
A short squeeze is a very temporary event. Once it's over, the share price will begin to decline quickly. Anyone left holding shares on the way down will lose their money. Moreover, if they only joined to squeeze the shorts, they'll lose their purpose. Despite what the memes say, they'll absolutely start selling when it looks like there isn't any more money to be made.
WSB presents an extremely over-simplified version of the stock market. They look at graphs of short interest and assume that no new short positions have been opened since this started. In reality, hedge funds are likely closing and opening short positions all day, every day. They're trying to push the idea that total short interest is a valid indicator of when the squeeze has started, but it's not valid at all.
Frankly, the level of misinformation coming out of WSB can no longer be attributed to Redditors having fun making memes. They deliberately remove comments and accounts that don't toe the line or pump the stock. They deliberately push flawed ideas to convince newcomers to buy more shares. They're pumping the stock, and the early GME buyers will take advantage of the pump by dumping their shares. It's basically a pump-and-dump at this point.