MM's naked short stocks all of the time. It's part of their function as Market Makers. The problem is that they abuse the power. Per the "rules" they are supposed to be independent and make their money between the bid and ask. Instead, they actively take positions and stop being independent. This EXACTLY what happened with GME and it happens all of the time in the pennies.
Ever see a stock hit a hard floor or ceiling and the price will not go above or below that price ALL DAY? That's not the open market. The open market wouldn't have that pattern. It is the MMs deciding they don't want the PPS to move in that direction for their own reasons (usually greed). This has happened to XMET many, many times. The hard floor last Thursday and Friday is a prime example. At open the price fell to about 0.008. Within 15 minutes the MMs had gain control of the market and instituted a hard floor at 0.01 for the next two days. Unmanipulated markets don't create hard floors and ceilings like that.
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