Pure speculation, but could these institutional investors be plays to fleece the shorts via interest on shares they lend them instead of via a squeeze? One thing I haven’t been able to get my head around completely is the pension fund investment. Those types of investment funds usually have a restrictive, less risk tolerant approach in investing that wouldn’t fit well with holding for a squeeze.
Lending the shares to fleece Citidel and the other shorts on interest would derisk an AMC buy a bit because your lending itself would prevent a big boom and bust squeeze. But the cash flow from the shorts basically becomes a tax to keep existing.