Not an expert or even a participant in this whole thing, but it seems to me that if there is a short squeeze (as i understand it after a week of reading the news) that is only bad if there is a limited amount of stock. If GME release new shares and the hedge funds buy up those new shares at a lower price than the WSB 300/400 buys, that could be bad for the WSB crowd.
NB - Not at all sure this is possible, or that GME would want to sell their stock for 100 when there are buyers at 300/400.