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) -- We are about to see the largest short squeeze of my lifetime. The current short position? Roughly $125 million has been sold short on a company that is trading around $1 billion; that analysts project to make $140 million in fiscal year 2011; that grew revenues more than 100% last year.

Usually, shorts try to make money when stocks go down basing their short position on the company being overvalued. Unfortunately, when the underlying company is worth several multiples of where it is currently trading and adding to the short position only inspires and enables more buying, not less -- you have the makings of an epic short squeeze. So, what are the shorts betting on? They are betting that

China MediaExpress Holdings


is a fraud.

Is it a fraud?

1. CCME has been fully vetted by

Starr International

-- headed by Hank Greenberg -- 4 months. Also on the board of directors and checks monthly numbers.

2. CCME has been independently vetted by

Global Hunter

-- 3 months.

3. CCME has a top four auditor,



4. It is #1 on the


China List of Small-to-Medium Sized Companies with the Greatest Potential.

5. Its


Rank is #1.


Investors Business Daily

gives CCME top marks, best marks out there actually.

7. Its CFO is a former auditor of

Price Waterhouse Coopers

, who just bought $1.5 million of stock.

8. Dividend policy starting in the next 90 days.

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9. Signed contracts with


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(NKE) - Get NIKE, Inc. (NKE) Report








, etc.

10. Independent investors have visited the company and not found indication of fraud.

11. Mike Koza, who has averaged 33% a year for almost 10 years, owns CCME.

Is it a good deal?

1. Fully Diluted Market Capitalization of $1 billion.

2. Last year, revenues grew more than 100%.

3. Projected to make $140 million FY2011.

4. Routinely conservative/beatable guidance.

What about the shorts?

1. The shorts are now naked shorting as evidenced by RegSho.

2. The quantity of shorts over the last six months has gone from around 1 million to more than 6 million, an increase of 600%. Meanwhile, the stock has gone from around $10 to $20. So, I am assuming that on average, they are underwater.

Technical Analysis?

Bullish TA: Cup and Handle

Lastly, I want to talk about how the mind of an investor works. When a stock trades in your direction, you feel good about it and don't think much about it. When a stock trades against you, however, you tend to re-evaluate your investment hypothesis and consider changing your mind.

My perspective is the following. If CCME goes to $25 and you have 6 million shares short that are all underwater -- are the shorts going to short more when there are no more shares available to short? Or are they going to reconsider their investment hypothesis?

At the time of publication, Bradford was long CCME.


The Shanghai Numbers - Special Report

A Short Seller's Tale

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This commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program. The views expressed are those of the author and do not necessarily represent the views of TheStreet or its management.