Hi hope this is not the case! Hedge funds can make money by selling securities, and not necessarily securities that they own. A short-seller borrows a security from someone else (usually from a brokerage firm’s inventory) and then sells it.
After a while — ideally, after the security goes down in price (or depreciates) — the short-seller buys back the security in the market and repays the loan with the asset that he originally borrowed. The lender doesn’t have to repay the original dollar value, just the security in question. The profit (or loss) is the difference between where the short-seller sold the security and where he bought it back, less commissions and interest charged by the lender.
You don't know if that's what they are doing. You are simply stating a possibility. You really think they bought all those shares to sell to short sellers? That sounds highly unlikely. Whether you like this stock or not it looks like it is set up for a pump sometime soon. Affymax went black on purpose for financial reasons. What it did was pretty much exactly the same as what CMFO did and the chart looked very similar going by percentage changes after the announcement. Then Affy got pumped big time afterwards.