This post explains how the lack of Gamestop stock to cover shorts only drove the price of the stock even higher:
The most important thing is that there were so many shorts that there weren't even enough stocks being traded to cover them. It was such a sure thing that the price would go down, nobody was paying attention.All those institutions aren't just desperate to cut their losses, they actually HAVE to come up with stocks and their aren't enough for sale.
This is like when oil futures went negative in June 2020, except with a twist. Back then, oil prices plunged because winning the future contract meant taking physical delivery of thousands of barrels of oil. The GameStop flip drives the price up to cover the promise to cover the stock short.
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