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)?
Answer 1. Nothing, other than Jail Time with Massive fines...
Answer 2. Every one of the money Houses has Owners, and if the Money Houses can't pay, Won't Pay, or go tits up, then the Owners have to pay after liquidation of Money House Assets...
and they Don't want to be on the hook for ALL of the debt....
But, All the Money Houses also have Huge Backers, like Soros, Rothschilds, Gates, etc....
So the LIST of people on the hook for all the Shorts, is a Long List of Big Money....