TLG Short's, page-53

First, that 1% ratio is short/shares (generally the pros look at the short/float ratio). TLG's float is 246M shares for a 1.2% short/float ratio.

The more important factor is the liquidity of the stock. A 1.2% short/float ratio would be totally insignificant for a highly liquid stock (e.g. AAPL or TSLA), but it can be very significant for a thinly traded stock like TLG. One way to see this is to look at the order book. If you check the ask side and start adding up 3M shares, you'll see that closing out 3M shares all at once would push the SP significantly higher.

Another way to see it is to look at TLG's history - because the shorts have been squeezed before (just not in such large numbers). On Nov 4, the shorts closed 400K shares (3.1M total trading volume) and it sent the SP up 8.5%. On Apr 7, the shorts closed 240K shares (2.16M total volume) and the SP rose 13%. The shorts also got squeezed on Apr 26 (a 25% SP increase), but most of the price action that day was driven by retail aping in.

Regardless, a few things to note: First, on previous days the shorts were squeezed, they never accounted for more than 15% of total shares traded. (Likely b/c once algos sniff a squeeze in progress they will pile in to try and front-run it). So, if 3M shorts were to get squeezed now, we might expect 20M shares to be traded in a single day (which would be an all time record for TLG by far - TLG averages less than 20M shares traded in a month). Second, none of these days had a straight-forward catalyst for the squeeze (no ASX announcements on these days). Third, the biggest squeeze in TLG's history (400K shares) was only a fraction of the 3M short shares that are currently hanging.