You are correct and this does happen IE GameStop a year or two ago. What makes you think this is remotely the same as what we see at Lynas to day.
The short volume was stable at 6~7% for most of February and all of March., April & May. From May till mid-august it had a quick rise to about 11%. Even this rise was less than 2% per month. Now there are many people are crying about the high short level it has been about 10 ~ 11% for a month.
Again you are correct but this is a Lynas board and I do not see where this is a problem for Lynas stock. The shares that are shorted are coming from investment banks. Primarily SS and JP . These banks have to do the opposite of what shorters are doing so there is a short term impact, usually a lot less than 2 weeks. then every thing is back to normal. Since most of the people doing the most complaining claim to be long term holders it does not impact their holdings at all. It can be ruffles to day traders. Remember for a short to happen the bank has to buy a share the shorter has to borrow it then short it. Net change to market over a week or two is zero.
If you look back in history State Street (SS) disperse all the Mt K shares for the holders of Lynas at MT K. Sorts would go up for a week or two before disbursement. This was shorting by SS getting ready for shares. Then SS received the shares they would use over half to cover the shorts. Rest they would sell over a week or so. The stock was stable because of this where dumping all at once would have resulted in a price drop for at least a few weeks.
In US the IRS and SEC are conducting hearings to limit naked shorts by investment banks, The IRS is involved because these companies can use this to avoid paying CG taxes.
I could never explain how this works on this board If you want to understand this, there is an exciting book to read and it is short. Not often that you see 5 stars on a non fiction technical book
https://www.amazon.com/Naked-Short-Greedy-Streets-Failure/dp/B09RQC1F1Z/I doubt it. Volume is changing way to little per day or week to indicate that. Shorts can cause wild changes in price, I do agree. Seldom do they last more than a week or two. So unless you are a day trader in this stock just ignore it. one of the major reasons there is a 4 day delay in total short posting is to prevent day traders from using this info. It is not a technical problem because they report total trades right away.
As an example of this in US LYSDY and CF have a 20 minute delay because they are pink sheet stocks. If I log onto my brokerage account, I see the trades as they happen. Can also see bid and offers in real time. Delay is just to prevent some activity people do not like.
(20min delay)