There are some knowledgeable people on this board who have suggested strategies that the Shorts may be using to hedge their positions. My question is if they are, what will that do to the pps when a deal is announced? It would seem to me that if the Short has a long position through an option, might they be content to let the pps rise, even dramatically? I mean say the pps is $130 and they cover their short position as the price rises to $140. Their entire long option position would now be worth the most it has been and they would benifit even more if the pps continues to rise. My point is, could we Longs actually benefit by this short hedging strategy? Would we al be working together towards a hgher pps?
Input from those knowledgeable on these matters would be appreciated.