Very often the long short fund is also a lender of stocks - They get a return on the stock via two bites - dividends and the fee for lending stock. They can also tend to end their loan position if they want to so its not as easy as saying they are playing both sides they may just view the transaction as another way to get income.
Some funds refuse to loan but I think many do it.
TFC Price at posting:
$1.26 Sentiment: None Disclosure: Held