IMO the better question to ask is where the money from the short...

IMO the better question to ask is where the money from the short sell has gone?

If you buy shares it consumes cash (but you own shares). If you short shares, it generates cash but you have the loaned shares.

Option 1 - Put the cash in the bank and hope CXO's share price falls
This is a super risky strategy IMO because its exposed to the risk Core does something well. Its also exposed to the risk that lithium shares generally do well. Not even GS can guarantee that the whole Lithium market won't increase (despite their reports).

Option 2 - Put the cash into a generic basket of shares
This is basically a bet that Core will do worse than the general market. Its still exposed the risk that lithium shares do better than the general market and its exposed to the risk that Core announces something special. If the broad market lifts and lithium shares lift the same amount you are still ok as a shorter. Your risk is limited to a knock-out announcement by Core. Its possible this is what shorters have done.

Option 3 - Put the cash into other lithium companies you expect to do better
IMO this is the most likely candidate. You take a pair of companies which are looking to get into development. One with a smaller resource, one with a bigger resource. With the opinion that a bigger market cap differential should exist than does exist, you short the small resource and buy the big resource. If this is the case, the money from shorting CXO is sitting somewhere like PLS, AVZ, LTR or AKE (and of these I'd guess AVZ/LTR as more comparable pre-production companies - at least when the shorts were established). If CXO goes up 20% or 30% but so does LTR there is no short squeeze because there is no pain. What causes the shorter a problem is if the invested leg doesn't increase while CXO does. If the money was in LTR then they would be laughing because of the rejected takeover offer. While on a huge profit (from the reinvestment into LTR), shorts are most likely seeing how the takeover situation unfolds because a takeover of LTR would resolve their issue of gaining cash to rebuy CXO. Over the last year PLS and AKE have done well so any short CXO/long PLS or AKE position would also have done well.

If some of the shorts have gone into AVZ the situation is more interesting. They can't close easily even if they wanted to.

If the cash from a CXO short has gone into a big resource company, the triggers for closing the short would be CXO resource upgrades or broker upgrades indicating that the market might more highly value CXO.