Why open a 7mm naked short on a $1.75 share stock?
"the stock stopped going up when the people who were buying finally realized that the "news" was a non-event ... a forgone conclusion on a procedural matter."
How do you figure that the granting of this petition was a foregone conclusion? Looks to me like there was a risk that it would be denied, which would damage the patents and the litigation. The removal of this risk should be worth something IMHO.
Regarding your question "How do you figure that the granting of this petition was a foregone conclusion?" I think a better way to state it is that the stock price already had the issuing of the grant built into it -- The stock price closed within, what, 1cent of the day's open yesterday. Now, had the petition be DENIED, may have seen a precipitous falloff. So given that the stock closed virtually unchanged following the granting we can certainly deduce that the decision was expected or "discounted" in the stock price.