I dont see why there is any need to get our knickers in a knot over the short positions. The shorts are not a direct play on this stock going down, almost certainly a hedge by funds that also own.
That's why the positions where taken out in correlation to when we joined the ASX200 when funds where also purchasing, every stock in the ASX200 is shorted to a similar level.
Lithium in general seems to be getting shorted slightly higher that the rest of the AX200 but I suspect that is just purely because of the bull run its had so a need for a greater hedge.
IMO & DYOR
AVZ Price at posting:
99.0¢ Sentiment: Buy Disclosure: Held
