Let's explore that:1. They begin shorting short the stock at...

Let's explore that:

1. They begin shorting short the stock at 34c, hoping for the price to decrease, so what they gain mtm on the short position they lose mtm on their long
2. They pay a stock borrow fee of 5-6%/annum on the borrowed shares
3. Stock trades 25c, they lose 9cps on the long and gain 9cps (all mtm) on the short less the cost of the borrow.

Takeover bid occurs, stock goes bid back to 34c
1. They need to close out their short position below 34c to get back to par, but they are still down the cost of the borrow
2. They gain on the long position back to 34c where they were originally.

Where do they stand to benefit?

It's really easy to call out/blame manipulation when the price isn't going where we'd like it, but at the end of the day there are any number of plausible reasons the stock is being sold off. And it may not be the exiting holder everyone expects. Who is to say it's not another larger holder/s sub 5% exiting and need not disclose as a result? Asset managers reallocate all the time based upon fundamentals, liquidity needs to cover redemptions etc.

Don't get me wrong, I'm long the stock on the opportunity 5 years from now. NdPr pricing seems to me at least to be irrelevant when it's still in the ground and not accessible.

Just my 2c worth.