No one picked up shares at 0.000001 last week - retail investors on Trade on 4 digits - 6 digits is for brokers.
MMs do not "short" penny stocks. As part of making a market, they may have periodic short positions throughout a trading day if they fill buy orders for more shares than they have in inventory, but they also often have inventory when they fill sell orders. Having an inventory does not mean that they are going "long" any more than having a temporary net short position is "shorting." This kind of temporary short position is legal and necessary for efficient trading.
The 0.000001 trade is a broker covering a temporary short position - nothing nefarious just a MM providing liquidity to a very illiquid stock.
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