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posted ago by ProudOfAmerica ago by ProudOfAmerica +49 / -0

I understand the idea that there is a massive short on GME, and that it will (eventually) cause an even-more-massive 'short squeeze', sending prices 'to the moon'.

What I don't understand is how that translates into an actual financial benefit to (real) shareholders - because of two 'holes' that I see (as an amateur).

The 'near infinite' nature of the debt seems to allow for two scenarios that may be 'the first of their kind'.

First - What's to stop the 'big guys' from simply 'erasing' the transactions that say they have a short position? If they 'own' the markets, can't they (in a big enough emergency) simply scrub the books? (Of course I know this would be 'illegal', but what's to stop it from happening?)

Second - If the loss to any one entity is large enough, what's to stop them from simply declaring bankruptcy (or some similar 'out')? How would you 'recover funds' from an entity that is no longer in operation (and/or doesn't have the 'infinite assets' that would be required to cover the new 'to the moon' price)?