The further we get from the $3.50 - $4 area ( the range where I think shorts get uncomfortable) those that are short and margined will be receiving calls. They can put money in their accounts to make up the deficiency or they can buy back shares. Most will opt for the latter. A squeeze may or may not happen it depends on whether everyone is running for the exits at the same time. You also have to combine this with new long accumulation. Those that do scans on stocks breaking out will find Vringo also, many chat rooms momo players ( I am in 2 and we are all going in Monday) will be buying, TUTS are becoming more comfortable with the story and may dip their toes now. Also when/if this gets over $5 even more TUTS who are prohibited from buying will come in. The short/long debate clearly was in the shorts favor (primarily because the legal process is unpredictable, in terms of time, and most people lose patience) The events of the last few weeks indicate to me that the story favors the long side. Tobinator gives a good analysis on this. The short position is the greatest ever and the enthusiasm to buy long is building here. The balance is clearly to the long side. Let's see what Monday brings.
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