This is even worse as GME is at 130% (aka naked shorting was going on, and is illegal).

The shottseller of GME basically sold shares they didn't possess, under the expectation shares would become available.. Ergo making them possess them at the time of share sale. It was made illegal 2008 because this behaviour contributed to the financial crisis.

This means as long as WSB holds and the price stays ANYWHERE above their shortsale undervalue, said investor no longer has the ability to buy the shares they don't possess, to then sell. Which will cause a massive boom because all their shares which were severely undervalued suddenly flood back into the market, at the new higher rate. They still cannot afford the new rate shares, and thus their insurers have to eat the cost.

That cost is likely too high for the direct insurer and will cause their insurer to weigh in.

This naked shottseller isn't just looking at going bankrupt. They're looking at taking down several insurance compa ies with them.

Which is why you don't try to sell what you don't own kids! Even if you "think" you can "get hold of it real soon."