Not phantom shares per say. The way I understand

Not phantom shares per say. The way I understand it, in order to short a stock, you first have to borrow the shares.

If you short a stock without first borrowing the shares, it's called "naked shorting"

If you don't acquire the shares to borrow against for the short transaction within a prescribed time period you create a situation called a "Failure to deliver".

This means you somehow have to acquire existing shares to turn the naked short transaction into a normal short transaction.

MM acquire shares to cover the transaction in a number of ways.

They can drop the share price drastically so people "panic sell". Someone will almost always panic and sell

Otherwise they have to entice people to sell their shares by raising the share price. MM don't want to do that. It moves the price up instead of down, causing a loss on their short position.

MM can also get around it by selling the naked short shares to another MM, which starts the time clock to cover all over again.

This is how I understand it anyway, someone correct me if I'm wrong.