They probably won’t exist in a few years. Comparable in a way to blockbuster.
They will.
The whole reason this started is because GameStop actually made some smart moves into transitioning into a more online and ecommerce based company. Ryan Cohen joined their board of directors after he acquired a 12% stake in the company. He had previously ran Chewy, a massive online pet supply store that he eventually sold for 3.5billion and rivaled Amazon for pet supplies. He could easily turn the company around, and the initial surge of GameStop stock purchases was due to his involvement in the company. Initial investment into the stock wasn't even majorly about the shorted stock.
Now add that with the enormous amount of PR and financial injection GameStop have they are definitely likely to transition their success and fortune into a successful eCommerce business. This whole business has probably just lined them up with a massively dedicated, loyal and newly wealthy customer base too.
Whilst their current price is definitely going to come crashing down to a more reasonable level, there is no cause to think bankruptcy or insolvency is in their future.
Sure a bunch of hedge funds lost a bit of money, most of those will only have a small amount of risk in any one name though, they'll survive.
I wouldn't say "a bit of money". Melvin Capital, the main instigators in this short have already had to have a $2.75billion bailout on Monday. That $2.75billion doesn't even cover todays gain if they had to close out their positions at this price. They will literally owe over $10billion right now on GameStop stock, and if something major doesn't happen and the stock fall they are will be filing for bankruptcy very soon. They're not the only ones.