A company does this when they have no hope of succeeding as a going concern. The only interest and hope management has is to get share price up and then cash out. Everything they have done has been towards that end. The daily paid PR, the split, etc.
This has no impact on retail investors that lawfully borrow shares (read: not naked) and sell short. Who is supposed to be afraid? Why should those holding lawful short positions be afraid aside from the always present threat that LIVE is somehow worth dramatically more or might be acquired at a premium.
This talk reminds one of the rantings of Patrick Byrne at Overstock about naked short sellers. If you are a naked short, you should always be afraid.