WAMUQ + Shorts + Naked Short Sellers = Massive SHORT SQUEEZE!!!
I would like to remind everybody what happened to Volkswagen when Porsche made a run on the company. All one has to do is Google "Volswagen Short Squeeze" to get the information. I will put some of it here.
This is totally FRIGHTENING for anybody who is naked or short and a "To The Moon" price for longs. Read and weep/enjoy!!!
Short sellers make VW the world's priciest firmSarah Marsh
FRANKFURT
Tue Oct 28, 2008 1:54pm EDT
STOCKS
Volkswagen AG
VOWG.DE
€77.00
-0.39-0.50%
12:00am EST
Porsche Automobil Holding SESHG_P.DE
€43.74
+0.25+0.57%
12:00am EST
Exxon Mobil CorporationXOM.N$68.19
-0.58-0.84%
12:00am EST
FRANKFURT (Reuters) - Volkswagen (VOWG.DE) briefly became the world's biggest company by market value on Tuesday, as short sellers caught betting on a price drop with borrowed stock scrambled to find shares after a buying spree by Porsche (PSHG_p.DE).HOT STOCKS
Short sellers desperate to close their positions paid as much as 1,005 euros a share during the session following Sunday's news that there was less than 6 percent of VW voting stock still floating in the market.
At that price Volkswagen's voting stock was worth 296 billion euros ($370 billion), or more than the $343 billion market capitalization of Exxon Mobil (XOM.N).
VW shares later closed trading on Tuesday up 82 percent at 945 euros.
The share price has rocketed since Porsche revealed in a surprise announcement on Sunday that it had effectively gained control of 74 percent of Volkswagen's voting shares.
In March, when Porsche was still sitting on a long-held 31 percent direct stake, it said it was not seeking to increase its holding to 75 percent, bearing in mind that the state of Lower Saxony holds a 20 percent stake in VW.
"The speculation of going to 75 percent overlooks the realities of the shareholder structure of VW, Porsche said at the time.
"In view of the fact that Lower Saxony as second largest shareholder owns 20 percent of VW, the probability of acquiring the necessary shares in freefloat is extremely low."
Meanwhile on Tuesday a spokesman for German market regulator BaFin said it was looking into the VW share price movement for any sign of insider trading or market manipulation.
Porsche denied it was manipulating the market and said that the market had mixed up cause with effect.
"We vehemently reject the accusation of share price manipulation," a spokesman for Porsche said. "The ones responsible are those that speculated with huge sums of money on a falling Volkswagen share price."
Porsche's statement on Sunday revealed that it had raised its direct stake to 42.6 percent, held a further 31.5 percent in cash-settled stock options and that it intended to increase its holding in the world's third largest carmaker to 75 percent next year.
It said it was announcing its plans because the number of short positions in VW were considerably higher than it expected and it consequently wanted to give investors the chance to unwind their bets "without haste and without greater risk."
Around 12.8 percent of Volkswagen's entire market capitalization was on loan as of October 25, the most recent day for which data was available, according to financial market data consultant dataexplorers.com. This compared with an average 5 percent for all DAX stocks.
The "mother of all short squeezes," as one analyst phrased it, led to an investor outcry alleging that they were duped by Porsche.
Dealers said those traders who had sold borrowed VW shares in the hope of buying them back at lower prices had been panicked by the announcement of Porsche's holding.Someone must have been very desperate to get a hold of the stock, so there will be a big surprise at some point who will have all these losses
AI
