Zion Oil & Gas Inc (ZNOG)

[tisdal]

If the short position truly believes no oil...

They will continue shorting or selling into the open Market causing more supply then demand which continues pushing price lower.

With the unit offering, demand that would usually show up in the open market now is diverted to the units purchasing, further decreasing the demand on the open market.

To buy these units, some investors sell some of their current holdings to participate in the unit offering. This increases the supply on the open market causing further decline in the pps due to decreased demand.

This is something the smart short position saw coming and sell to drive price lower so that when current investors sell to buy Units,the short position can buy back their shares at lower price thereby inceasing their profits.