Detailed analysis on why UWMC’s addition to the MSCI World Small-Cap Index can be a significant catalyst

Sorry it took a while for me to respond again. To make up for it, here are some paragraphs.

A squeeze is a catalyst, but not all catalysts are squeezes. Like say a stock has zero short interest, but announces out of nowhere they've secured a 500 billion dollar contract with the US government and that news drives their stock price into the stratosphere. That news is a catalyst, but not a squeeze. That's an extreme example, but I hope it illustrates the point: any event with potential to move the price is a catalyst. A squeeze is one such event, but far from the only one.

This is part of the problem imo, and why squeezes get brought up in UWMC threads. Ever since the GME squeeze happened, it's like a lot of people have internalized the false belief that the only way a stock price ever moves up is with a squeeze. I suspect it's novice traders fomoing into the market trying to catch the next GME, or possibly idiots, or possibly people straight up lying to try to pump whatever stock they're currently bagholding. I'm not saying that you are one of those, or accusing you of anything...but those are the angles on this I have seen before. UWMC is certainly not the only stock I've followed with people clamoring nonstop and nonsensically about a squeeze; it's all over the place ever since GME happened.

But for what it's worth I do agree: UWMC is not a squeeze play. It could happen, but that "could" is million-to-one odds...and that's bad. However, it is a long-term value play with rock solid fundamentals that I suspect has an upward price-correction coming as it becomes more established vis-à-vis trading on the market. And even if it takes a while to price-correct, in the meantime I collect dividends and premiums on covered calls. Long players will do well here if they really know how to play long.

/r/wallstreetbets Thread Parent