User 194768

Solarfun Earnings Could be the Perfect Trigger for a Short Squeeze

I think the huge short position has to do with a very large quantity of bonds issued by SOLF in January 08 that can be converted to stock to sell at a profit -- and the bond holders bought shorts to protect their value. So here is my question:

If the stock has the potential to rise significantly in price, why would the bond holder convert and sell at a much lower price (not maximize their return)? Isn't it likely that the shorts would need to be covered next week and the rising price would delay the bond holders from converting/selling until they feel there is a peak reached that is much higher than Friday's price???? That would really put the squeeze on the shorts !