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BLK insures/backstops Melvin. Melvin goes to do the dirty work of shorting the stock, paying BLK a cut of the juice when the short pays out. BLK buys a large chunk of the outstanding float as a hedge against just this scenario in case GME turns upwards unexpectedly to a small degree. BLK assume (incorrectly) that they have enough of the outstanding float to cover their asses if this exact scenario playing out occurs on a smaller scale. BLK's faulty assumption is that GME will not get moon-shotted by a whale.
Their only option is to try and bluff everyone out of the stock before Friday close. The holders are unfazed. "It's all over but the shouting - I've come to take what's mine." - David Lee Roth - Mean Street
