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Short sellers on margin may get forced out by brokers. Others might also. I'd it up for the same reason, hoping to cause a squeeze.
Auto-trading bots might do crazy things to close positions upon cerrtain price activity.
Dumb traders might bid it up initially if there is hype about an increased offer or bidding war.
If the market likes the deal a lot and sends STX stock up, the effective value of any stock-based bid also increases.
These are all just examples. Impossible to say how any one stock will react.
jaw i already explained this once before. but here i go again.
interest on a short depends on supply and demand, also broker. i have never paid more then 5-8% and that is a yearly rate.
during a buyout (BO) the price will shoot up to about 80-90% of the total amount as it not set in stone, even with a 50% or higher short interest. why? because it isn't a done deal and a lot of people will sell when first announced, thing is those who lent out to a short prob ask for the shares back but they will also unload the shares (a one for one trade so nothing gained).
who picks up all this slack from everyone selling??? the market maker (bagholders in OCZ case) and you know dam well the market makers are not paying over the BO price so. there you go...
Let me get something straight... You have never seen a situation where CompanyA offers X for CompanyB but the stock price jumps and stays above X? What's more, this happens even without a large short interest.
I'd take StockSock's advice over yours anyday.
Pipster .. just out of curiosity how have you structured your short position. No im not being insulting.
I am honestly curious if your selling naked calls or just shorting stock.
Far as my question i think its a valid question no matter what stock it is. What makes the situation unique is a 40.6% short position.
It would be hell to cover that much.