Jagman.....let me preface by saying that I don't think that the following necessarily applies to FASC anymore, although I believe it did previously during the dilution.
An old, very conservative college football coach named Woody Hayes used to justify running the ball more than almost everyone else by saying that 3 things happen when you throw the football, and two of them are bad.
1) Good.....pass completion
2) Bad......incompletion
3) Bad......interception
I think we all agree that it is the MM's desire to make the most possible money for themselves. And in my opinion, the MM's take full advantage of dilution situations, providing them with greater opportunities to naked short.
Now, putting the MM's on the other side of the ball for this analogy, here are three things that can happen to them when their focus is on shorting stock.
1)Good....continually short a stock down (naked short) with no interest in covering; simply taking all of the money, no spread required, creating a psychological effect of fear
2)Good....short a stock with the intention of buying back at cheaper prices and make money on the spread, while creating a psychological effect of fear
3)Bad....short a stock only to find that strong, continued buying pressure causes them to have to cover
If the MM's interest is mainly in buying and raising the pps....as in your example... they basically eliminate the naked shorting aspect, which is potentially the most lucrative for them.
And thus taking away one of those two real good ways for them to make money.
In fact, the MOST lucrative one for them, potentially.
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