Funds go to "borrow" GME shares from stock dealers
From there they dump GME from $50 down to $4 over 1-2years
It's not fake shorts like Forex useless brokers.
They sold the actual shares which needs to be paid back to stock dealer + interest of course.

Fund made lots of money but still greedy did not take profits, then WallStreetBets found their exposed ass of Melvin Hedgefund....

GME price went up, fund don't want to cut position decided to double down, shorted more than 140% of actual available stocks.

Even called daddy for backup (their main hedge fund pumped in 1.5billion). Then GME doubled in a day. Daddy money within one day burn.

So now they rekt whatever they sell below $40 need to buyback way higher at $360 or much much higher because still got more than 90% not covered

so u think what will happen tomorrow? will melvin close their positions?

close as in buy back the shares at loss(cos they sold it at $4 and now have to buy back at $500 and higher) and return it to the brokers, cos now they are 'borrowing' the shares from the broker(seller) and they already sold all the shares to retail investors when its priced at $4

so now they have NO shares in hand at all, but they have to return the borrowed shares back to the broker tomorrow (friday), so now they have to buy it back from the retail investors, but now the retail investors are not selling and continue pumping up the price

so if melvin capital cannot return back the shares to the broker tomorrow, then they will incur a heavy interest per day for each day they delay the return of the shares to the broker