What dilution? Those shares already existed. It's just primary stockholders selling some of their shares, which I believe is their right. Plus, I don't see where you're making up the 50% number anyway.
That's good! With so much of the stock being short, they're going to have to cover at some point. There could be a massive short squeeze coming up. Plus, with that many shares short, there's not a lot of room to have additional shares short. There's not much further downward pressure from the shorts. At some point they panic and this thing jumps up, probably above $40.
No way it can get near the teens. With such a large percentage that is short, it's much more likely that a short squeeze will come before more shares will be shorted. This thing could jump above $40 very quickly if the shorts panic.
Who cares? With that large of a short position, they're going to have a very difficult time covering their position without the price going significantly higher. That much short position is definitely in the longs' favor.
I fail to see the problem. With this high percentage of the stock that is short, it can't remain like this. There must be a short squeeze coming. At some point all those shares must be covered. There's definitely going to be some upward momentum.