I know that there are numerous theories as to who is buying down at these levels (i.e. shorts covering in advance of the closing of the merger; accumulation of cheap shares by HF's or other savvy speculators; etc), but the $64M question remains: Who the hell is selling at these ridiculous prices???
As with any trade, there has to be a seller at the other end of the buy. So the seller will either be another bona fide shareholder or the MM.
For the scenario where it is another bona fide shareholder, what current investor group could possibly have any interest in selling at these levels? If it was a nervous nellie unsure about the merger, they would have gotten out prior to the shareholder vote. Seeing as the vote passed, it makes little sense to have held thru that only to sell now. And if it was a retail investor trying to lock-in profits from when the sp ran up from the 2.2x levels to the 3.5x levels, this also seems unlikely as only a few lucky souls were able to grab shares at this level before it shot up thru the 2.3x, 2.4x, 2.5x, etc levels. As such, anyone trying to lock in profits during this freefall would have done so already at higher levels, and not yesterday or today. Anyone else have thoughts as to who may have an interest in selling at these levels?
For the scenario where it is the MM acting as seller, what scenario could there be for a MM to want to walk the sp down??? I can see this logic when they act as buyer, but if they have to step in and act as a seller, I would suspect that they would want to make the buyer pay premium pricing if ths buyer really wants to get his fill. I'm not an expert on MM ops, so I'm open to hearing whatever anyone's got on these questions...
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