Your response doesn't make sense to me either. It doesn't matter when they bought the stock; a day, a week, or a month ago. The point is that they sell at the time the stock goes up some modest amount, allowing the shorts to buy those stocks at that time (without driving the price up very much, which they would otherwise do, since they are forced to buy, more or less regardless of price).
Ok, I think I see the confusion.
It's a matter of scale. Day traders can damp the effect of a reasonable number of extra sales. But a not a whole lot of extra sales.
Now look at the data on short interest. Short interest in TSLA is huge. Almost 30 milion shares. That's 58.9% of the total number of shares available for day-to-day trading (the float). These are ridiculous numbers.
TSLA trading volume is about 1.5M shares per day. That means that if 10% of the shorts bailed out, the trading volume would be almost 3x normal with 2/3 of the volume being short sellers that are buying. That will move the price up a lot.
The float on TSLA is about 76 million shares. That's the total number of shares available for day-to-day trading. The rest are locked up. So if the shorts all bailed on the same day and bought shares, 58.9% (according to Yahoo) of the shares that could be sold would have to be sold to meet that demand. That would drive the price through the roof and is why they won't all bail on the same day. Some will close out their positions early, some later and some will hang on to the bitter end.
I don't know much about the VW short squeeze so I can't compare the two situations. But if Tesla executes well, there will be a short squeeze because the stock will go up as as Tesla demonstrates that:
- they can sustain manufacturing rates that make the company profitable
- they can deliver cars at that volume without crippling quality defects
- there's enough demand to buy as many cars as Tesla plans on making
Tesla's going to have to demonstrate this over time. Assuming they do it, I don't know that there will be a day or a week that you can point to and say "there was the short squeeze". But the short position in TSLA is so big that unwinding it *will* move the stock price up a fair bit.