Looking at Hedge Funds in general and their holdings, 10 billion is a drop in the bucket.It is, and some do - or at least hold some portion of the shares in reserve as a hedge (or short to cover as a hedge the shares the hold). But if you hold equal amounts, well, any move is offset - you've got nothing in real value. You have to be bear or bull at least slightly for it to make sense.
https://hedgefollow.com/largest-hedge-funds.php
Story now is not making much sense. Shorting Gamestop would bring such small noodles to their game, piecemeal, it makes almost no sense. Regular folks shorting Gamestop seems to be a part of it and seems more likely but I don't know. Maybe some of the smaller Hedge Funds wasted time with this or came up with this scheme to bloat it up so they can sell:
https://hedgefollow.com/stocks/GME
Links looks like older more recent data but gives general drift of investments each Hedge Fund does. Wacky stocks going ballistic for no sound bases will cause a ripple effect, people selling good stocks for bad, people sense of using profits, growth and other indicators start to go out of the window and may just decide it is too risky to invest in current climate. For example, AMD had a fantastic 4th qtr, maybe one of their bests, expected growth is huge yet dropped like a rock today. A number of investors indicated it should be around $120 -> it goes the other way -> confidence looks rather low for no apparent reason. Have to see what tomorrow brings.