If the short seller is the Chinese buyer they don't have to cover their own naked shorts. When the sale goes through that just becomes the cost of the acquisition. Otherwise the selling is: (1) an attempt to shakeout weak retail holders or push some black box into selling based on a high volume price drop greater than 10% formula or (2) the same Chinese buyer is selling their shares for whatever profit they can get today because the company is about to rebuff their offer, and they don't want to pay more than $9.30/share.
IMHO, scenario #1 is more likely, because if JAG were to come out and say "no, the company is worth more than $9.30 per share," the stock would probably pop, and the Chinese would realize even more profit. As in the SVM short selling takedown attempt I think someone is trying to panic investors into unloading shares at a cheap price so they can accumulate those shares and realize a 40% gain when the sale is concluded.
Early AM block selling was about 1/2 million shares, for which the short seller (maybe the Chinese?) was able to cover at a profit and then pick up shares all day long for 10% less than they could have yesterday.