This might be a question for ming over on IV, but it seems that these reverse conversion options trades are happening with much more frequency than they use to a few month back. I would surmise that that might mean that the shorts are running out of ammo, but that's just a guess on my part. What is not a guess is the frequency of the matching call/put conversions and that those trades are a part of a manipulative scheme to create more "phantom" shares to short.
Nicklaus I have been tracking reverse conversions for about 6 months but in earnest over the past few months. Going back in my notes from just Jan 1st the conversions created about 1.850 million phantom shares or 18,500 calls and 18,500 puts. and thats just from Jan 1st. So thats more created shares then normal. As you mention shares are no doubt impossible to find. Manipulation in earnest.
Someone is getting really really short today. Volume is up and it's taken a lot of effort to get this stock down and keep it there. There are a bunch of buyers, maybe it's short covering, maybe it's long buyers, but it makes no difference because someone is selling a lot of stock to hold it back trying to take advantage of this sell off and options expiration. Going to be very painful for them, not a matter of if, but when. They better pray they can keep it down because otherwise they lose on shorting the common and being naked on the options side if some of those strikes become in the money again.
nicklaus, people have been saying this for 3 years. It's never been painful for the shorts. They raid the stock whenever they feel the stock is getting ahead of them and they just destroy any momentum the longs try to create. It's just a very, very bad company that can't even sell their flagship technology.