Yep, it's hard to understand. The MM's in OTC land do some very sketchy things. And these things are confusing.
You're correct, though. In order for an MM to make money shorting, the price must go down. But at .0001, it can't go down any further, so how can the MM's make any money? The answer, IMO, is they fill buy orders at .0001 with "phantom shares" in an attempt to make the stock look weak (the buys orders are masked as sells) in an effort to lure others into selling their shares at .0001. Remember, MM's make their commission every time an order is filled whether it's a buy or sell. But I also believe when those weak hands sell, the MM's not only cover their naked shorting, but they will also buy additional shares to go long because they know news is coming. It's so fraudulent, but just the way the game is played. IMO, the things that occur in the OTC markets is one of the most legalized form of fraud in America today.
