I understand what you're talking about. And I'd agree if I was...

I understand what you're talking about.
And I'd agree if I was to hedge portfolio or established stock against macro factors downside risks. Like Telstra or Comm bank against recession.

However:
With GXY you have disruptive tech market and GXY has 2 massive projects to execute.

You really want to hedge your profits against risks associated with execution of those projects while leaving yourself in the position to capitalize on both outcomes.
Either way it goes, you can exit your hedge both ways.

It's pretty common strategy.
It's what drives accumulation/distribution waves in the trend.

If those shorts aren't hedge shorts (in large numbers) working the accumulation/distribution pattern but pure bear shorts:
Then good luck to holders!
Pure bear shorts don't open such large positions and end up on the losing side of the bet very often.