Are the guys who shorted in threat of bankruptcy? Will the big banks be on the hook?
Yes the hedge funds are in threat of bankruptcy there are other hedge funds loaning them money apparently to stay afloat, big banks shouldn’t be impacted unless the HFs owed them money.
Bigger concern may be some of the brokerage houses that will eventually have to give the original owners back the shares that were borrowed. If the HFs don’t cover their shorts by buying the stock back then the brokerage house that loaned the stock to them is still on the hook to make the account owner whole that the brokerage borrowed it from to lend out.