With the valuation as it is, I am interested in buying more but am going to wait a bit to see where the stock bottoms out. With the heavy volume in the early going we might get a capitulation type day in the stock which would create a nice entry. When I look at a 1 year chart on this name, you see in early May 2007 a 'gap' in the chart - where it opened 1 day substantially higher than the previous day close. This appears to be in the $28+ range and this is right where the stock is now. On most stocks gaps in the chart are generally "filled", meaning a stock will at some point go back to fall and fill in this 'gap' (this is a controversial theory among chartists) - if it is correct or not, really is not the issue - it just happens a "lot". So we might get some support there. I will be adding more today as I see where the stock settles - Crocs is not going out of business, but this free fall is not a fun thing - that's for sure. This is a stock many bears have been betting against for a long time, hence why I don't want to get any further in front of the freight train. But based on analyst estimates we have a company trading at half its growth rate. Doesn't mean it could not go to a third of its growth rate but at some point logic must follow...
- Crocs Inc. (nasdaq: CROX - news - people ) may be famous for its holed, foam-like shoes, but the European Union's Office for Harmonization in the International Market ruled in December that Crocs' Registered Community Design, the E.U equivalent of a patent, is invalid. According to the ruling, Crocs' Beach model shoes "lack individual character" compared with other similar brands.
- Holey Soles Holdings, located in the Vancouver, Canada, filed the complaint against Crocs in the E.U. claiming the Niwot, Colo.-based company should not be allowed to forbid other shoe manufacturers from producing similar designs. Crocs plans to appeal the ruling, though the dispute is not the first between this pair of shoemakers.
- Holey Soles and Crocs, formerly known as Western Brands, had been selling essentially the same shoes between 2001 and 2005. In early 2005, Western Brands reorganized to become Crocs, and became aggressively ambitious in its growth strategy and in its attempts to push competitors out of the game. Crocs filed a lawsuit in 2005 against Holey Soles in the Federal Court of Canada, and Holey Soles fired back by filing for a declaratory judgment from a New York court stating that Holey Soles' designs do not infringe on Crocs' intellectual property. The issue is currently pending.
Long Crocs in fund and plan to be long Crocs in personal account soon
