Ah, good ol Warren. Be very careful with him - he is quite clever and will usually outfox you.
One of his favorite tricks is to short the hell out of some company he wants to buy. Then when it tanks, he aquires cover shares in a private placement directly from the company. Next, he buys on the open market at vastly reduced prices.
So, he makes money on his short, he covers for a song with a private placement, then he buys more shares cheap and acquires the corp.
The final kicker is that all the sheep begin buying when they see Warren doing it. So now he's making money on the way up.
Since most of the companies he does this to are probably good corps, he makes money in the long run as they grow, because now he owns them. The last time I saw him pull this stunt was on USG over the summer.
Yep, true FAT CATS don't make money just one way on a deal - they make money SIX WAYS.