My opinion....
Hurt or help...
Let me say this first....companies like Torvec, have been brutalized over the last ten years by the Nite Equities, etc..of the world. No major deals, capital issues, etc...because of this, it's been a perfect storm for the shorts. They have taken advantage of the opportunity and have been a significant factor in the erosion of the value of Torvec. Round one, albeit a very long round one, goes to the shorts...why because they could and the company was ultimately defensless to stop it.....the price remains effected by the shorts essentially for the same reasons...
An event, such as your sizeable deal scenario, would naturally cause the buy side volume to grow along with the price....I suggest to you that the amount of short activity will increase dramatically at that time to try to stop the momentum and attempt to create a feeling of "this isn't a very big deal" amongst potetial buyers...thereby hurting what could be a larger run up in market value...If enough buying pressure is created, and the run is strong, the savy, large MM's with big short positions will step aside and let the euphoria play out and the share price settle in at a higher level...they will then average in and begin to add to their short position at these now higher levels...that still hurts shareholders...the shorts only help the shareholders if they have to cover all of it...
If the deal is of a such significant magnitude that it is deemed that the value of Torvec will be of significance because of it...the share price would reach levels requiring the shorts to cover...you dont want to be the last naked short standing when that music stops...
To those who dismiss the short info disseminated here by Knot, I say it is a factor in where we are, not THE factor...but it is real and dismissing it is frankly misguided...
