"shorts start building up new positions"
This is how they played it for YLO. They knew perfectly well the thing was going to pennies but instead of shorting it straight down to there, they would let it come back up again before doing another down blast. It's the reverse of buying on the dips, ie. they short on the spikes. That way, they extract much more money., and they were utterly cynical about paying the dividend, because they knew it was going to be eliminated soon anyway. Anyone buying in for anything more than a very quick flip was just throwing away their money.
I have no position in PSN, just mentioning what I saw with YLO where I was caught. About all I can recommend is check the short positions when they are updated (should be fairly soon) and see how much they've backed off. In the case of YLO, they hadn't backed off after the first dividend cut - which finally convinced me to sell and just before the divi was eliminated (so at least I saved something from the wreck).