The market price is a consensus between long term buyers and short term sellers on the upswing, and short term buyers and long term sellers on the downswing.
The long term folks are full of it on the upswing, and some of them losing sight of their game plan, puking it up on the downswing. The short-term folks make for the liquidity in the market, and take their five percent which ever direction the market is heading.
That's a very crude view of market liquid mechanics, but like any good rule of thumb, it works fair to middlin'.
Orbite is not a going concern as yet, but it is a tightly held stock because it promises so much. Without the short-seller, Orbite is an illiquid trader with no apparent market value.
When a material bit of news hits the internet, who is selling to the newly convinced long-term buyers?
The short sellers that's who. They provide the shares in an otherwise illiquid market. These are shares newly borrowed to be repurchased as soon as possible.
The large old short position is there for one reason only. Insurance for the broker. The short position mitigates the company's unlikely but possible catastrophic failure to perform. As the company establishes itself as a profitable producer with market support for the building out of a multi-facility production base, the short position will be adjusted to match the new reality for the company.
Are the shorts at risk for several million dollars? Sure. Is it about equal to commissions gained on bought deals? Maybe...ball park wags are good enough here...can the short-sellers make it up when the company turns into a mega-star? Absolutely.
If you're standing around in the crowd waiting for a 'burning' of the evil shorts, think about the crazy mobs that still form in large cities around the world, you don't need to be like one in them....be thankful you live here where the markets are relatively speaking orderly...find a secure spot in your well heated home, and curl up with a book about Warren Buffet instead.