I'm not going to debate whether or not AFFY will soar or fall tomorrow. That battle has been waged for weeks/months and most have picked their position already. There WILL BE a shareholders' meeting and most probably (98%) everything will be revealed...the other 2% is for what we can't know we can't know. BUT here are the scenarios for MARGIN SITUATIONS BASED ON DIFFERENT OUTCOMES:
1. Worst case...(whatever that may be) and the stock drops significantly. NO MARGIN CALLS ON LONG HOLDERS because all stocks under $5.00 are subject to 100% paid ownership rules. This is INDISPUTABLE BECAUSE IT IS BASED ON SEC AND MARKET REGS.
2. Best case...(whatever that may be) and the stock soars. By definition, because ALL SHORT POSITIONS (individuals and institutions) have an "UNLIMITED LIABILITY", THEY MUST BE KEPT IN A MARGIN ACCOUNT AND ARE FULLY SUBJECT TO THE MARGIN REQUIREMENTS ESTABLISHED BY THE BROKERAGE FIRM FOR MARGIN CALLS. IF AFFY FLIES SIGNIFICANTLY (as I personally believe it will), ALL SHORT POSITIONS become subject to INVOLUNTARY COVERING (depending on the price movements). A brokerage firmis NOT REQUIRED to notify clients of covering actions they take (although most do try to notify). BUT IF AFFY OPENS AT $6-$8-$12 OR WHATEVER the brokerages will immediately take covering action WHICH WILL FURTHER SERVE TO AMPLIFY THE SPIKE IN SHARE PRICE.
3. Unknown case...(whatever that may be). It is highly unlikely that there will NOT be a conversion to the OTC following the closing of today's trading...In other words, AFFY will trade on the OTC beginning with regular hours (NOT in pre-market). But unless AFFYMAX and TAKEDA release news in pre-market this won't matter. It is, however, possible (I believe very likely) that a deal will be announced between Affymax and Takeda AT the Shareholders' meeting and that the stock could be halted...and if the deal is a DONE DEAL halted permanently leaving SHORTS required to PAY IN CASH since they can't liquidate position
I bought 1000 shares at 1.92 because I felt gambling. I really don't care for the money. The the real reason behind my purchase is that the worst I could lose from this is 2k - and that's the absolute worst case scenario, but on the flip side, the most I can gain is unknown. I like that unknown factor!
IF HALTED PERMANENTLY it would be because a DEAL (to buy AFFYMAX or convert to a Private Royalty trust) has been approved by BOD. They would provide details on how to convert your shares to whatever financial arrangement has been approved. BUT shorts won't have any way to buy shares (if halted) and thus would have to come up with cash immediately to cover their short positions.
I asked pbjorkl904 to post time of meeting since he'll be there. I have no idea whether info will be released today, today after market closes, tomorrow before market closes or during/after the meeting. That's all in the hands of BOD and Brenner at this point!!!