In 2021 Robinhood Turned Off the 'Buy' Button for AMC, and in 2026 It Infinitely Mints AMC Stock Tokens
In 2021, Robinhood disabled the buy button for AMC during the GameStop short squeeze, where a fixed share supply created a feedback loop. By 2026, a new dynamic emerged on the Robinhood Chain: meme coins like $MEME, denominated in tokenized stocks of companies like AMC, promised to drive short squeezes by forcing the authorized participant (AP) to buy underlying shares to maintain the peg.
The article analyzes three such events involving AMC, Hims & Hers, and Farmmi. It finds that while meme coin buying did generate real stock purchases (e.g., ~$7.6M for AMC), a sustained squeeze is impossible due to the tokenization mechanism's built-in "negative feedback loop." When a token's price rises above the stock's, the AP creates new tokenized shares by buying the underlying stock, arbitraging away the premium and massively diluting the float (AMC's tokenized supply grew 19x in 72 hours). This transforms buying pressure into a transient "impact cost" that fades quickly, often within hours after markets open.
Key conclusions: 1) The system's value lies in the regulated issuance/redemption channel, not the meme coins or platforms built on it. 2) The real speculative asset is a bet on corporate attention, not a leveraged equity position. 3) "Fake" tokenized stocks (clones with no backing) pose a significant regulatory risk. 4) The very feature that makes tokenized stocks robust infrastructure—a live, expandable supply—is what prevents a traditional short squeeze. The 2026 defense (unlimited issuance) proved more effective than the 2021 one (blocking buys).
marsbit09/07 12:52
