If you announce a bid for a company with a high short interest, there's likely to be a short squeeze, sending the share price up. Do you then have to adjust your bid even higher to reflect the new share price?
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If a company is trading at, let's say, 10 dollars with a ton of short interest. You announce a bid of $14, generally that will be the cap on how it high it jumps. Sure, it could go past it and go to $15 but logically it will revert back towards $14, with a discount pending for risk of closing, etc.
Simplistic example, but the point still stands.
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