Yes and they most probably have knowing "BD". "Shorting against the box" occurs when an investor sells-short securities that they already own. The name is derived from the thought of selling-short the same securities that are held in a safe deposit box.
The strategy behind this approach is to lock-in "paper" profits on the investor's long position, without having to sell the stock. If the price of the stock held by the investor increases or decreases, then the profits, or loss, on the short position are offset by the profit, or loss, on the long position.
The IRS views "shorting against the box" as a "constructive sale" of a long position, which triggers a taxable event unless certain conditions are met.
In essence "BD" has nothing to lose on this but much to gain as they are offsetting the loss of the long position by leaving those shares alone. But are making huge profits by shorting on the low end. And just waiting to go back as they will make money all the way back up.
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