IIG Short Squeeze Alert

A reader wrote in to me to alert me about a short squeeze on IIG, IMERGENT INC.

“If you ever wanted to see what a major “short squeeze” looks like, you may have your chance with IIG (Amex). The company has a float of 10.2 million shares, out of which 5.5 million have been sold short.  That means that 55% (!!!) of the trading float has been sold short. Here is the link to Bloomberg to verify this information:

Today, IIG made a new 52-week closing (and intraday) high on above average volume:

If you look at the above chart, you can see the RSI, MACD and Stochastics are now all positive. The stock is not overbought and is above 10/20/30/50 day moving averages.    Check out some other charts for IIG:

The company has started to buy back their own stock:
 

One of the top “LBO” firms (Steven G. Mihaylo of Vector Capital Group) has recently started a position in IIG, meaning that they may want to offer a “buy-out”:

This is a list of the top institutional and fund holders of IIG:
While it is very hard to make predictions of how high IIG will go, it is very obvious that sooner or later the shorts will have to cover.   Now, you may think that the rise of the stock from about $12 in August 2006 to now $24+ has caused shorts to capitulater, you are wrong.  Take a look at the monthly short interest on IIG:
And here is the last interesting statistic.   IIG has been on the “naked short” list for over 50+ days now.  Look at #30:
 

While it is hard to predict how high will go, there is no doubt that the potential is here that IIG could easily see mid $30’s very soon.    And for those who may think that maybe IIG is “overvalued”, its current P/E is 2.7 and going forward P/E is 18.  Most others companies in the same sector are trading around 30-35 P/E.”

Please as always, do your own due diligence.