Well CBW, you make a simple but logical deduction when you say: "This allows them to closely monitor it during hours. At the end of the day they close out their short position to prevent exposure of news breaking after hours, and this sends the price back up."
Look at what happened today:
35,500 shares traded
16,000 shorted
To me it would seem logical that the shorter who might have sold those 16,000 at 5 cents might have waited to see what happened during the day, and realizing that the stock was not going down he probably bought the shares back at the same price and will try the same gimmick on and off on a regular basis hoping that he will hit the jackpot if bad news comes out! These days, with commission charges being very low, this type of game is exactly what keeps the professional penny stock players busy making money like professional gamblers do at casinos and sports events.