The Anatomy of a Squeeze: How POET Technologies Became the Market’s Newest Meme
The fuse was lit last week when Wolfpack Research targeted POET. Short sellers usually point out bad technology or falling sales. Wolfpack tried a different approach. They focused on a strict tax rule. The firm claimed POET’s growing cash pile could trigger a complex IRS status called PFIC. For US shareholders, this status means brutal tax rates and a mountain of complicated paperwork.
It was a clever strike meant to make retail investors panic and sell right before tax season. The plan failed almost instantly. POET management fought back that very same day. They outlined clear steps to protect US shareholders from the tax hit, including things like QEF elections. More importantly, they announced formal plans to move the company’s legal home to the United States.
The tax threat vanished. Traders on WallStreetBets and StockTwits held their ground and pushed the stock higher. Late-arriving short sellers were suddenly trapped.
The Nvidia Connection
Surviving a short report is a good start, but to trigger a massive squeeze, you need a story. In 2026, the hottest market theme is the hardware needed to fix AI data bottlenecks. This involves complex tech like Silicon Photonics and Co-Packaged Optics.
Anders Storm, the former CEO of Sivers Semiconductors, provided the spark. He published a highly speculative theory on X linking POET to the biggest name in AI. Storm built a chain of logic. He noted that his former company supplies parts to POET. POET supplies components to Celestial AI. Marvell bought Celestial AI earlier this year. Marvell is a key supplier to Nvidia.
Does POET have a direct, public contract with Nvidia? No. The link relies entirely on retail guesswork. But on message boards, a believable theory is just as powerful as a signed deal. Everyday traders grabbed the idea and ran with it.
Squeeze Mechanics in Overdrive
A great story needs the right market setup to explode, and POET was ready. Short interest had quietly climbed from 6.1 percent in early February to 8.6 percent by mid-April. Those levels were near historic highs for the company.
When the tax news cleared and the Nvidia rumors spread, the options market went wild. Retail traders did not just buy shares. They bought massive amounts of call options. For every single put option traded, there were ten calls. This huge wave of buying forced market makers to purchase the actual stock just to balance their own risk. This classic chain reaction pushed POET above $10 for the first time since March 2022.
Officially Memed
The final piece of the puzzle arrived when Wall Street institutions joined the fun. Once the stock started flying on massive retail volume, Roundhill added POET to its Meme Stock ETF ($MEME).
At that point, the buying cycle fed itself. The ETF had to buy shares automatically, regardless of the price. Being added to the fund also acted as a giant billboard. It attracted momentum traders who simply wanted to chase fast-moving stocks. The ticker became a cultural and financial event rather than just a technology investment.
The Reality Check
The price chart looks like a dream for traders. However, anyone looking at the actual business needs to step back.
At a $1.3 billion market cap, POET is trading at a massive 130 times its expected sales for the year. The company still loses money and remains highly speculative. It is riding the very real wave of new optical technology. But heavyweights in the same industry, like Lumentum or Coherent, actually generate billions in real revenue with established clients. POET’s current price is based entirely on future hopes.
The AI hardware opportunity is genuine. The connection to Marvell and Celestial gives investors a real reason for optimism. Today, though, POET does not have the actual sales to justify its high price tag.
The Bigger Picture
This wild ride highlights a broader truth about today’s market. Speculative trading is back in a big way. The caution we saw in early April has completely disappeared. The retail money that pulled back weeks ago is now pushing options trading back to extreme levels.
The POET squeeze is a clear signal for the whole market. It shows that money is flowing freely. Traders are willing to ignore a lack of profits today if the AI story sounds good enough. Time will tell if POET secures a massive contract or crashes under its own weight. For now, the meme cocktail is poured, and the market is drinking every drop.
Disclaimer:
All views expressed are my own and are provided solely for informational and educational purposes. This is not investment, legal, tax, or accounting advice, nor a recommendation to buy or sell any security. While I aim for accuracy, I cannot guarantee completeness or timeliness of information. The strategies and securities discussed may not suit every investor; past performance does not predict future results, and all investments carry risk, including loss of principal.
I may hold, or have held, positions in any mentioned securities. Opinions herein are subject to change without notice. This material reflects my personal views and does not represent those of any employer or affiliated organization. Please conduct your own research and consult a licensed professional before making any investment decisions.