Wrong. The party that sold the calls to Icahn already had them so they were hedged. The shares just exchange hands, there isn't going to be massive buying on this news. Effectively, the float available for shorting will be reduced, but if there are no other buyers joining Icahn to outweigh those selling this stock - the low float will actually make it sink even faster.
Shorts provide a cushion due to short covering. These daily bounces you see on this stock is supported by short covering.
HLF short term will bounce around 30-40, but in the long-term it is in a downward trend.