TLG Short's, page-55

"TLG don't have to ever go to 0% shorted shares, but could go to 5% and stay there?"

As to this bit, they can hang as long as they can tolerate posting margin and paying interest. With the SP at these levels, the margin probably isn't too pressing on the short side (since most of these shares were sold short at higher prices). Interest payments tend to be between 0.5% - 3% APY, so they won't kill you, but it is a steady drain.

Things get interesting if the SP starts to rise, because the margin requirements can go up very quickly as the SP increases. A squeeze happens when the shorts get margin-called and can no longer meet it.

One thing we don't know is whether this is a single entity that is doing all the shorting or multiple entities shorting together. If the latter, any short who gets cold feet could begin the buying frenzy that causes the rest to get margin-called. Otherwise, the squeeze would need to be triggered by longs buying enough shares to push the margin requirements past the point the shorts can tolerate.

After six months of steadily increasing shorts, I'm pretty confident they won't suddenly decide to give up and eat a loss. I think it's a game of chicken at this point - they'll wait until the longs capitulate or the market forces a margin-call (via a rising SP).