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Crocs: The Beginning of the End?
By JLP | November 2, 2007
Crocs (CROX), the company that makes those UGLY (but comfortable, so I’m told) shoes was a darling of Wall Street since it began trading in February 2006 at $30 per share. The shares went from $30 to $90 in about a year and a half, split 2-for-1, and kept on rising until yesterday. That’s when the bottom fell out. The stock closed at $74.75 on Wednesday and opened yesterday at $53.60 and ended up closing yesterday at $47.74, down over 36% in one day. OUCH! According to today’s Abreast of the Market ($) column in the Wall Street Journal:
Crocs tumbled 27.01, or 36%, to 47.74, its largest fall ever and the Nasdaq’s biggest percentage decliner. Quarterly profit more than doubled on continued demand for the shoe company’s clunky, plastic, brightly colored clogs. But sales weren’t quite as stratospheric as some had hoped, nor was the company’s fourth-quarter profit outlook, sparking fear that fever for Crocs is cooling.
I have never cared for this company as an investment because it always seems that companies like this shoot straight up and then straight back down again once the hype wears off. Yesterday may have proved the beginning of the end for Crocs ride. Once traders figure out there’s no momentum there, this stock will most likely end up in the trash bin. No, I’m not a stock expert. This is just MY opinion.
Is Crocs a good company? I have no idea. I think this was much less about it being a good or bad company and much more about momentum.
Topics: Business News, Investing |