Did you make that up? Adding to your position when you have a good stock that gets temporarily knocked down is a proven good investing strategy. I would bet more money has been made buying good companies that have a good dividend yield due to a depressed stock price than lost on bad ones that shouldn't be bought. Hell, think how much money was to be had if you bought HPQ when it was down just over a year ago and Line Energy is probably a safer bet then them.
This stock is so well controlled by MM's, I wouldn't be surprised to see it close right at $5 so both the strike 5 puts and calls go worthless.
I think the selling pressure on LNCO shares is from BRY holders that recevied LNCO shares and want out of the investment. It will correct itself with time. It's a great arbitration trade (short LNCO - probably have to buy deep in the money puts) and go long LNCO if you have the cash and time. I made some pretty good money playing this trade the other way when LNCO was trading $4 higher than LINE.
FE is not a bond. If the economy approves they will sell more electricity and earnings will increase. If the economy stays bad, interest rates won't go up.
They are basically paying a price that puts the company at a PE just under 20 when the have 1.74B of debt. This seems too rich based on this company's past growth (or non existing growth). I have to believe BRY's better earnings the past couple quarters is due to higher oil prices also which are likely to come down next year. I'm not sure LINE/LNCO would go down if the merger gets called off, but BRY will come crashing down.