In my opinion and purely speculation but... if there are shares showing in your account, the broker is the face to the customer and has to make good on it. Now it may involve some finger-pointing behind the curtain on who/where "the system" failed and where the money comes from that gets sent to the brokers to pay for broken leverages (broker, MMs, DTCC, SHFS, SEC, etc), but there are many protections/insurance built in that will help make sure investors get what they're owed when they sell...IF they sell.
Now the situation has been split between pre- and post-exdividend. Pre-exdividend the market has the chance to close out short positions (naked or normal) by purchase of those individual AMC shares that were sold short before the cutoff date. I'm guessing that pretty much nobody is going to get scared out of their shares anymore by the FUD, all that's left is battle-hardened apes and they didn't sell between here and $72 before so why would they take a lower sale price, right? So there's only one way to unseat lots of shareholders and that's by taking the price higher and higher and see how many shares can be flushed out. For every AMC share they gain and close Pre-exdividend they save themselves buying TWO parts Post-exdividend. Keep in mind the short seller owes not just the ooriginal share of AMC, but an additional APE share to the lender to close out after Post-ex. That's why all that discussion on Reddit stopped in it's tracks when they were asking why the shorts don't just wait until after the Post-ex and close positions by buying a "reduced" AMC share... it's because they'll still owe the other half through the APE share to complete the close/cover puzzle.
So imagine a scenario where the PPS of AMC is $1000 on 19Aug, goes to $500 on 22Aug, and stays at $500 while the PPS of APE goes wild in excess of $500+ based on how unsuccessful the shorts were in getting AMC shares Pre-ex. If "billions" of fake naked short-sold shares STILL require the other half of the puzzle Post-ex, then APE could divorce the price connection to AMC and fly to thousands MORE because the synthentics need to be mated before closing. This is probably key to AA's comments on the ability to sell tranches of APE shares to raise company funds and buy down debt by capitalizing on any synthetics. If they don't exist, or exist minimally, then it's no big deal and we just have common stock plus preferred stock splitting the price for market cap... and still deal with ~20% short interest that's been declared above the table.
In my mind the key to how high this goes depends on how aggressive lenders are in short share returns and close outs (whether Pre-ex, or if they're willing to wait til Post-ex and deal with even more complexity/uncertainty).
So Pre-ex squeeze of AMC, or Post-ex squeeze of APE; either way could be a win in the column for shareholders. And that's all before we even get to ISDA IM Phase 6 requirements...
Hopefully that all makes sense... it seems to snap in and out of focus for my sleep deprived brain every once in a while. LOL! :-P
IMO/NFA
