The following article is from a contributing writer at TheStreet. The views expressed, including any positions taken on securities, are independent of TheStreet's news coverage.NEW YORK ( TheStreet) -- 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 ( CCME) 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, Deloitte.
4. It is #1 on the Forbes China List of Small-to-Medium Sized Companies with the Greatest Potential.
5. Its Zack's Rank is #1.
6. 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.
9. Signed contracts with Apple ( AAPL), Nike ( NKE), Sony ( SNE), Adidas, Toshiba, 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.