we know who is selling--lots of stuck longs that are panicking and rushing to the exits...dumb money mutual funds that thought RSH was good value at $12+ but now decide to clean it off their books so clients don't ask them why they are invested in a stock that just dropped 60%
but ask yourself this--who is buying??? this is the more relevant question
would you really be shocked if in a week you woke up, RSH was trading 15% higher in the pre-market because an activist fund filed a 13d announcing a 9% stake and saying that they wanted manageemnt to exlpore strategic opportunities including a possible sale to Best Buy?
wouldn't shock me at all
buying at 7 represents a risk/reward proposition of 5% down, 75% up (if a deal was ultimately closed at $12)
while a deal could take a while, just rumors/speculation of a deal is good for 30% at these levels ($7-9)