The disclosed short interest is much more than the actual reported short interest. The mm’s have a loophole by which they can fabricate shares, meaning they don’t actually borrow them. They naked short them under the guise that they are “maintaining an orderly market.” The rule is designed for extreme situations where the mm’s can’t find shares to deliver, which rarely if ever happens, outside of a true short squeeze. They could of course find shares if they simply raise their bid and pay more for them. But they don’t want to do that. Because they, in a case like AVXL, are net short and want to maintain a downtrend.
So what they do is temporarily naked short—which doesn’t show up in the reported short interest—and then cover, rinse and repeat. They also use the HFT and spoofing. As Bas likes to point out. He is correct.
It’s the “slow drip” of relentless efforts to maintain the downtrend that has resulted in the suppressed share price. The Grand Canyon resulted from a relatively small river. Same concept.