I'd like to add to this the following scenario for explaining why short interest can be high even if the original shorters have closed their positions.
1. Lots of people are short.
2. Price goes up significantly, shorters get margin calls.
3. Price goes up a lot due to buying pressure from shorters closing their positions. (ie, the squeeze itself)
4. Price is now extremely high and fairly disconnected from fundamentals.
5. People notice the price is very high compared to earnings and open new short positions.
After step 5, there can be a ton of shorters in the stock yet there is not a very big chance of a new squeeze since the price at which the new short positions were opened is so high. Imagine how much the price of GME would need to rise to squeeze out the shorters who opened their position in the 300-400 USD price range.
1. Lots of people are short.
2. Price goes up significantly, shorters get margin calls.
3. Price goes up a lot due to buying pressure from shorters closing their positions. (ie, the squeeze itself)
4. Price is now extremely high and fairly disconnected from fundamentals.
5. People notice the price is very high compared to earnings and open new short positions.
After step 5, there can be a ton of shorters in the stock yet there is not a very big chance of a new squeeze since the price at which the new short positions were opened is so high. Imagine how much the price of GME would need to rise to squeeze out the shorters who opened their position in the 300-400 USD price range.