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Sunday, July 1, 2012

SKUL - Ready for A Volkswagen Type Short Squeeze ???

Volkswagen was one of the fiercest short squeezes in stock market history as comfortable shorts were caught in an intense squeeze that drove the value of Volkswagen shares to briefly be the largest by market cap in the world Read about it here.

I see another stock that has the potential for a fierce short squeeze. Skullcandy, Inc. (SKUL) is a Nasdaq stock with a float of 15.1mm shares. A whopping 73% of the float is short. It is the most heavily shorted stock out there. History is littered with smart money losing on short calls. TASR, PCLN, Volkswagen, etc...."Fad" stocks like CROX, SODA etc all had major short squeezes. SKUL is growing, profitable and has confirmed analyst estimates for this year. They are wildly popular and if managment is smart they will kepp innovating new deals and partnerships (Like the recent Dell partnership) . Insiders are buying - To me a major sign they know the shorts are wrong.

There are some great articles out there on why SKUL is ready for a major squeeze:

Heavily Shorted Stocks To Consider Before Earnings Read Article

Skullcandy: A Short Seller's Nightmare Read Article

Skullcandy: Perpetual Squeeze Coming Read Article

Skullcandy: The Facts Behind The Fad, And The Inevitable SqueezeRead Article

Shorts often win. However, history is littered with shorts that lost big on fast, fierce, squeezes. I believe SKUL has the potential to break free from the grip of the shorts as it heads into its next earnings report in August. If and when it does happen, it will be fast and fierce. I am long SKUL in the mid $13's. Volkswagen Me !!!


Anonymous said...

This is scary.

Mike Bishop7 said...

Thank you for sharing this with us! I came across your blog while I was online looking for a Volkswagen in McAllen TX. I'm happy I did because I love blog posts like this and these photos. I'm definitely going to subscribe to your blog and share it with my friends. Thank you again for sharing!

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