The shorts are the bag holders. Longs sell their shares to shorts at peak prices, who then return those shares to the lenders. The lenders could sell, but they

The shorts are the bag holders. Longs sell their shares to shorts at peak prices, who then return those shares to the lenders. The lenders could sell, but they probably won't since they are in this for the long-term and that's why they lent the shares in the first place. Short squeezes act like a much needed flush.