If Game Stop has any shares in the treasury, they should sell them now, and that will pump the company full of cash, and may make it more viable as it works out new marketing strategies.
I would not be surprised if GME is in discussions for a secondary offering. They can always issue more stock even if they have none left on the books, a vote by the Board they can dilute themselves and add another 100 million shares and sell some of them (say, 10 million) in a public secondary offering.
But that takes time.
Many troubled companies have organized themselves in a way that would allow themselves to pull the trigger quickly, by having some mechanism to sell shares to the public. One way is called an ATM (which is kinda ironic because it is like an ATM machine for public companies) where they have pre-arranged with a bank and ongoing prospectus that gives them the ability to sell shares At The Market (ATM) at any time through the investment bank - basically, allows the company to trade (sell) in their own stock. The underwriters usually have ability to move a million shares here or there and in this case, perhaps tens of millions.
I have also seen even more troubled companies, often startups and drug research companies that burn money with no income, that have a credit line open using their treasury stock as collateral. In that case they can close a deal very fast because all they do is call the bank and say “I need $1 billion” and the bank “lends” them $1 billion and receives something like $1.1 billion or more in stock as collateral against the loan. Of course, the lender promptly sells those shares “At The Market” immediately, the loan is paid off basically the same day, and the lender pockets a nice profit for having the credit available to the company.
Not sure that GME had/has any of these at the ready. But they should be talking to wall street right now because there is clearly a shortage in shares. The way the market really works is so bizarre and byzantine it would take many more paragraphs to explain, but when YOU buy a stock the trade doesn’t actually settle until the 4th day after the trade. Meanwhile, Market Makers have 10 days to settle trades and can roll that out indefinitely just by closing and re-opening. And in the middle, there are millions of people who buy and sell on the same day - these trades have to be settled, but it’s basically spinning wheels. The problem here with GameStop is that when you short a stock, you have to borrow it from someone else. But nobody is watching too closely whether there are shares available to borrow, and it’s almost impossible to calculate because the different players all have different regulations about when a trade has actually settled. It’s not like there are people in a back room trading paper slips around. It’s all electronic. The actual shares of virtually every company are held in a trust. The ownership is on a ledger at the various brokerages. Now you would think with blockchain technology and computer serialization it should be easy to track the numbers of shares out there that would prevent double and triple borrowing of shares to short - but Wall Street doesn’t want that. At least not yet.