I don't believe an account is marginable unless you sign the paperwork with broker. Might be wrong on that. I have repeatedly denied calls and emails from my broker to open a margin account.
When the short investor covers, the original shares are returned to the brokerage and original owner.
I think a lot of us own markers instead of shares at this point. From buying up naked shorts. I think this is why ntek originally tried the dividend path that didn't produce the results they wanted. Now the spinoff is being pursued but may be hitting a brick wall due to the lack of revenue being generated at this point by ntgl.