> The Company can issue more stock, diluting all shareholders, and sell to the short-sellers.
It seems to me that most of WSB crowd forget this kind of things.
IDK but another sane option would be that the regulator just pause trading on such stocks "until further notice" (I don't even know whether this is possible, but I guess that politicians can do whatever they agree to and pass a law or regulation)
Even if they don't, even if the funds go bust, only the early sell-offs from WSB will profit, while diamond-hands might be left with tons of $15 stocks that they paid $350 for...
Possible, but extremely unlikely. I heard a lot of the short contracts have an expiration date of Friday. No idea if that's really true or not. Issuing new stock has a long lead time. If it wasn't in the works a month or two ago, it won't happen in the next few days.
That is probably referring to options, not short sales. During a short squeeze the effect is basically the same, whoever sold "naked" call options will have to buy shares (or buy back the option, or buy some other option to offset the loss) to cover their position. Like short sellers, people who sell naked calls will start facing margin calls from their brokerage and will be forced to close the position at whatever price they can find (either for the options or the shares they would have to deliver if the option is exercised).
It seems to me that most of WSB crowd forget this kind of things.
IDK but another sane option would be that the regulator just pause trading on such stocks "until further notice" (I don't even know whether this is possible, but I guess that politicians can do whatever they agree to and pass a law or regulation)
Even if they don't, even if the funds go bust, only the early sell-offs from WSB will profit, while diamond-hands might be left with tons of $15 stocks that they paid $350 for...