Crypto trader's tale of secret Nasdaq memecoin takeover unravels

A post viewed over 800,000 times yesterday featured a crypto trader using a pseudonym who said he had acquired a controlling stake in a Nasdaq penny stock for $1.8 million. He outlined an unusual strategy to use memecoins to pressure short-sellers.

Dropping hints meant to generate excitement, he revealed plans to tokenize his shares, combine them with a memecoin, and start a campaign to squeeze the 92.3% of the float he said was shorted.

His story had a fatal flaw: the company he described does not exist.

A Community Note on X accurately refuted the idea that he could have bought shares in a company fitting that description.

Three hours later, the same user acknowledged making up some figures, framing the original post as deliberately vague but still a genuine attempt.

Memecoin traders' delusional approach to Nasdaq stocks

This reversal is noteworthy as it highlights a recurring pattern of crypto influencers spreading misinformation about actual stocks.

The previous night, memecoin traders attempted a short squeeze on Nasdaq-listed Hims & Hers. That effort failed completely, since memecoin transactions do not affect Nasdaq stock prices.

During the summer, crypto influencers sought to resurrect short-squeeze talk by discussing tokenizing NYSE-listed GameStop via memecoins or Robinhood Chain smart contracts.

A researcher discovered that 354 out of 361 Robinhood Chain contracts using the GME ticker had no connection whatsoever to GameStop's real GME stock.

Why healthy skepticism is needed

A commenter in the replies described the short-squeeze plan involving a secret memecoin takeover of a Nasdaq penny stock as nonsense, pointing out that a stake of that size usually triggers a disclosure filing.

The figures the trader gave were suspiciously specific: $4.8 million market cap, $0.12 share price, 92.3% short interest, $6.2 million in debt, and $380,000 in revenue.

He said he purchased a 37.4% stake for $1.8 million over three weeks via two brokers "so the [sic] I didn't spike the price".

He praised himself for what he called a brilliant plan to combine tokenized equity with memecoins, aiming to create "the biggest crossover story in financial history."

Even if his plan were real, it would hardly surpass genuine financial milestones like agricultural futures listing or the creation of exchange-traded funds.

Trader retracts memecoin plan: 'I won't do a memecoin'

His self-congratulation quickly faded along with his precise details.

Initially, the trader said he had intentionally altered numbers to prevent front-running. Later, deep in his thread, he deleted his promise of a memecoin. "There's no memecoin, I won't post a memecoin, I won't do a memecoin and this is not a memecoin ad. Some of the details are not finalized."

Effectively, he withdrew the very novelty that had made the post noteworthy.

By late evening, no specific stock with any actual metrics appeared in the comments or quote posts.

To sum up, an hour after the initial claim, he was defending it and comparing himself to Michael Saylor. Two hours in, a Community Note proposal was under review. Three hours later, he admitted, "the numbers are clearly off to avoid certain people thinking im trynna pump a certain stock."

A 92.3% short interest on a stock trading at 12 cents is nearly unprecedented and virtually impossible. Stocks under $1 are difficult to borrow at all, let alone 92.3% of the float.

A 37.4% stake, which preceded his later claim of a 'controlling stake', would normally require a Schedule 13D filing with the SEC.