Phr,
I think we can look at the events leading up to Black Friday to see whether they were able to cover a position or not -- consider that we had volumes of about 150M to 200M during those 9 days. Well, make that 8 days, if you discount Black Friday itself.
Now, consider that during those days, they had to keep printing shares to keep prices at 0.xx99, otherwise the pps would have gone up even faster. If they were short 500M to 800M at that time, their losses were increasing every day, with the pps hikes.
If they were covering during that run, they were competing with all sorts of longs accumulating and traders/flippers. Let's say 150M x 8 = 1.2B shares traded altogether during 8 days.
I think that, since they were competing with other people for shares, they didn't get anywhere close to a significant part of 1.2B shares -- now if such events caused this kind of price appreciation, what kind of spike do you think would have happened if they tried to cover during days which were not as "heavily traded"?
And, even in the event that they did millions and millions over the span of a year, that's gonna pale in comparison to the amount of money they're gonna have to cough up when/if they have to cover at dollars a share, compared to their slim margins of pennies a share from NSS.
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