We got to remember the other consequence of an AMC short squeeze.
If the hedgefunds get margin called/need to cover then they'll have to liquidate their long positions in stocks.
For example this is Citadel's main long positions:
(Right side is cash value x 1000)
SPY / SPDR S&P 500 ETF Trust 25,300,042 (so for instance they have $25.3 Billion in SPY)
TSLA / Tesla Motors, Inc. 16,340,907
TSLA / Tesla Motors, Inc. 13,815,397
SPY / SPDR S&P 500 ETF Trust 13,196,441
AMZN /
Amazon.com, Inc. 10,508,424
QQQ / PowerShares QQQ Trust 9,906,178
AMZN /
Amazon.com, Inc. 9,630,943
QQQ / PowerShares QQQ Trust 6,566,227
AAPL / Apple Inc 4,801,277
GOOGL / Alphabet Inc 4,460,200
So we could see a crazy flash crash in the entire stock market