Videolocity International Inc (VCTY)

[-Eric-]

Could VCTY be the Volkswagen of the Pink Sheet Market?

For those of you who do not know, Volkswagen was the recipient of one of the most historic short squeezes of our time. The company, at one point, became the worlds largest by market value... not because it deserved it, but rather because some greedy institutions had shorted the stock to no end, thinking there was no way the stock could rise. Well they were wrong and the stock soared amid a short covering buying frenzy. Could we be seeing a similar scenario with VCTY in the coming days? Could the culprits in this case be greedy Pink Sheet market makers who work under the assumption that these Pink Sheet stock go down, not up?

Obviously the scale and scope of a VCTY short covering rally will pale in comparison to Volkswagen, but then again you never know. When you consider the authorized share count with the amount of shares that have traded recently, it makes you think just how many shares have been sold naked.

Today alone VCTY traded 1/5th of its authorized shares. We've beaten this horse before, but it bears repeating. VCTY has only 105 shares authorized to be traded in the market place. On one day last week the stock traded 88 million shares, or pretty darn close to the entire authorized shares. The following day it traded almost 35 million shares for a two day total of 123 Million shares.

My point is someone is selling shares they don't have. This is the only logical explanation for the volume and price action. The day of reckoning is nearing as the stock is still under some serious accumulation.

Whoever is shorting the stock is betting that the price will fall so they can buy back the phantom shares they've been selling. If the stock does not fall, and continues to rise, these shares will have to be bought back on the open market. Also consider that a rapid rally in the shares will incite a greater need to cover short positions.

This is shaping up to be a promising situation for VCTY longs. It should be interesting to watch this stock trade over the next few days.


http://pennystockgurus.blogspot.com/2010/02/vcty-could-vcty-be-volkswagen-of-pink.html


VCTY is a stock I firmly believe has been shorted heavily. If the buying keeps coming the shorts will be forced to cover, and with only 105 million authorized VCTY could surge higher in impressive fashion. -Guru


What's also interesting about this is that the Guru doesn't believe in shorting conspiracies and is often quick to shoot them down... but not this time. Pretty interesting considering he's a very conservative analyst.