In this case, short-sellers were convinced that AOL could never raise the price of its service per month, so that AOL would forever be locked into a situation where if it did not get good advertisers it would not be extremely profitable from simple circulation. The fact that AOL took a price hike showed that this bear case was wrong. When the bear case is pronounced wrong, bears cover their shorts and the stocks they are short fly upward as they fight to get their shares in. I could have just said, they will be forced to buy back their shares. But covering is the term of art for that.
Analysts have to raise numbers.
Their greatest weapon in the promotion business is the raising estimates gambit because that's what drives stocks. Sure enough, no sooner are the words out of my mouth than it comes over the tape that Pittman is urging people not to raise numbers. AOL obviously will do better when it charges more, but Pittman was playing the game to the hilt, allowing some room to beat expectations by urging analysts to keep their numbers lower. Offer ten thousand shares every time the buy chorus breaks out. It means put the stock out on the offered side or the market, don't sell it down on the bid side or lower.