No. GameStop is too puny for any degree of these kind of shenanigans to be a problem for them. Even if they were caught in a naked-short position, short contracts always have a cash-escape option.
>How does the GME market trading value affect the rest of the stock market?
It doesn't. Some smart Redditors are running a pump-and-dump scheme. A lot of dumb Redditors are falling for it and are going to lose 90% of what they put in.
>they had zero intention of getting a monetary gain from this "investment". they are sacrificing their money on purpose to fuck with the hedge funds.
Those are the dumb Redditors I mentioned. The smart one cooked up this fiction about the nature of short selling and hedge funds to fool them.
You must be one of the Start Redditors.
>Blue Voters did this.
State election officials did this. Voters cannot be blamed for Biden.
Yeah, but the overall volume is tiny compared to the oceans of cash they have sloshing around.
>“The potential for loss is unlimited.”
Not accurate. In the fine print in the contract to borrow a stock there is always the option of bring back a huge wad of cash instead of the stock. This figure is set sufficiently high to make it something you go to extreme lengths to avoid. But there IS a finite limit to how badly you can get squeezed.
Yep.
Hedge Fund borrows stock from Market Maker to short it. Hedge Fund gets shafted by Redditors.
Market Maker gladly sells Hedge Fund some more of the stock at an inflated price so that Hedge Fund can give it back to Market Maker to cover their commitments.
Market Maker wins.