A company you will no doubt find in the news come Monday morning is a mortgage company called Accredited Home Lenders Holding Co. (LEND). LEND is the target of an all-cash buyout offer with a tender price of $15.10/share, but has been trading for about half that ever since the news of the buyout broke. The reason behind the low price? Investors were worried that the deal would fall through… but in light of getting regulatory approval for the merger early in the trading day on Friday, investors pushed the stock of LEND up over 45% to close at $8.90/share. But wait, in afterhours trading the acquirer, Lone Star Fund V,  dropped a huge bomb on the party… by stating they are not able to meet the conditions of the agreement and thus will not be buying the company. The shorts rejoiced and sent the stock down to $4.66.

This rollercoaster ride was perpetuated by the CNBC commentators pushing the stock and saying how “Iron-Clad” the specific performance clause was in the buyout agreement. Now Accredited is countering that the offer will still go through and will take legal recourse against Lone Star should they fail to fulfill their part of the deal. Jim Cramer is sticking to his guns that the merger will continue unless Lone Star becomes insolvent.

For anyone trading this stock up and down over the last week, if you timed it right you made a fortune. But many shorts and longs alike lost a lot of money depending on where they entered and exited their trades. Volatility creates enormous opportunity but also an incredible amount of risk.  We’ll just have to wait and see how this plays out in the coming days to know who wins and who loses.

[tags]lend, accredited home lenders, merger, buyout, lone star, shaun carter, mortgage, stock market, investing, volatility, trading, regulatory approval, cnbc, jim cramer, mad money, fast money[/tags]