I've been wondering how Gamestop itself benefits from any of this. It is nice to have a high stock price, but after all the short positions are closed, the stock will plummet again and align more closely with underlying business fundamentals. A temporary boost in stock price does little to fundamentally help Gamestop. So how does Gamestop leverage this? They are in need of cash. The hedge funds are in need of that GME stock.
So what would stop Gamestop from issuing stock right now and selling it to the hedge funds at a discount? Enough stock to cover all of the short positions, and at a low enough price that the cost wouldn't bankrupt the hedge funds. This could infuse Gamestop with enough cash to stay afloat for years and transition their business to online (like they have been proposing). Would that even be legal?
It would be a win-win for Gamestop and the hedgies. The other scenario, of letting the hedge funds die and the stock price return to normal is a lose-lose.
Can anyone smarter than me about the stock market explain if this would work and why or why not? Please tell me this can't happen.