When you short, you have to borrow shares from someone. If those shares increase in value enough, the person you borrowed from can demand them back in fear that the price will keep rising to the point where you won’t be able to return them. This is a margin call. The borrower can present more and more collateral to back up the loaned shares, but at some point they usually give up, and have to buy the shares on the market driving the price up further. That’s the squeeze.

So it’s not like they can just decide to wait it out. Sometimes they can, sometimes it’s out of their control.

Melvin Capital just got an injection of almost 3 billion dollars to help keep them alive after the pressure they’ve felt this year from their underwater short positions. They don’t say how much is for GME, but I bet it’s a lot.