You could just as easily say they have owned 7% before so they...

You could just as easily say they have owned 7% before so they are not adverse to buying up more.

If they are lending out to shorters (an assumption in itself) it could only be a fraction of their holding. The total percentage of A2M shorted is 6% and that is already relatively high by historical standards for the company. That is 6% borrowed from all funds combined, with presumably not alot of additional demand to lend out to.

Shorting in general at the levels usually seen in ASX large caps don't really have much impact on the SP, it's just something people like to focus on when the SP goes down. It's not like the USA. People put way too much weight on it IMO.

It stands to reason the main way Vanguard make any money is if the SP continues to increase ( which has been working well for them so far). Once it's overvalued in their view then they'll probably sell down again.