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The hedge funds are boy scouts?
Shorting can have infinite losses. Many (all?) online brokerages popup this warning when you attempt to short a stock.
You cannot short stock that you are unable to deliver (this is naked shorting, and illegal).
Somehow, the hedge funds shorted GME 140% of outstanding shares. IE, they somehow "borrowed" shares with the intent to sell those at a lower price for a profit.
As an aside, massive short interest against a company, makes it harder for the company to release stock/bond offerings and gain access to capital and reorganize the business in more profitable manner. Essentially, massive short interest can be a race to the bottom.
John Q. Public on social media sees this scenario playing out, and through discussion (since ~Aug 2020) realizes that if the price of GME goes up, there are more shares shorted than available to purchase, which could mean significant gains for "retail investors." All retail has to do is buy and "hold."
The hedge funds double down on their shorts even though the price of GME rises. Flash forward to mid/late January 2021, and the price of GME skyrockets. The hedge funds along with CNBC start shilling the potential massive losses for retail investors.
Simultaneously, CNBC advertises Melvin Capital covered all of their shorts; the math shows GME still shorted at ~120% of outstanding shares.
Within days, retail wipes out ~$5 billion from some of the hedge funds, including Melvin Capital. In response, Citadel, provides Melvin with a $2.75 billion bailout.
The next day, RobinHood, an online brokerage, which runs ~60% of its trades through Citadel, stopped their users from buying GME and other heavily shorted stock, and only allowed selling, which relieves pressure from the hedge funds at the expense of retail investors (i.e. the average public using RH to trade)..........and the hedge funds are boy scouts?
The only thing some of these hedge funds have in common with boy scouts, is they made stupid decisions and then went bankrupt.