I respectfully disagree...the easiest way to drive up the stock price is to use some of the $90m to drive additional revenue. It appears that they are doing this. They have started a significant TV ad campaign on Nick and Cartoon Network. My guess is that in the past they tried to rely on the buzz alone to drive the product. This can work for a while but eventually must be supplemented with a strong ad campaign. It seems that they may have waited a couple of quarters too long to start aggressive marketing but with a huge cash horde there is no doubt that they can catch up.
The other big thing they are doing is introducing new products (new styles, non-wheeled shoes etc). When you have an important brand like Heelys you need to leverage it by expanding the product line and getting more skus in the stores.
Finally, the expansion overseas is a great idea for growth. It has only been the last quarter or two that they hired an overseas Sales VP who will be headquartered in Brussels. Anyone who thinks that the Europeans don't follow American culture, just aren't watching very closely. I think that a focus on Europe will almost certainly result in nice growth in '08. Having someone HQ'd on the continent is a huge advantage over trying to do it from the US.
So there you have it...cash being spent on US TV ads, new products and European expansion. Anyone of the three would likely result in a nice bump in revenue. With all three in the works, I'm betting that '08 will see growth over '07. With any growth whatsoever this stock is likely back in the teens or perhaps even twenties exiting next year.
I think they can do everything you described and also buy back some shares. If the things you mentioned work out, a lower share count will magnify results. One analyst asked about possible acquisitions in the conference call. Why not acquire themselves at this bargain price? They got something like $20 per share in the ipo, and now they can by them back at $6.
They are #3 and 4 on the Amazon bestseller list for the non-wheeled shoes. That has to be selling some significant product for them. They should have a dtrong X-mas. Why did they keep lowering guidance? There can't be that much inventory left out there?