TMF has been using "old" data to back up their recommendation for SCSS all along. As more and more bad numbers stream in, even the old data start turning color for the fools to see and finally realize that the tide had turned. While following this stock, I get an impression that SC management had built up tremendous credits with analysts and followers over the years. Therefore, this crowd has been very patient and willing to give the management all the benefits of doubt. But, as time passes and more negative data piled up, this good will starts running thin and the love festival may soon be over. Listen in to the CC yesterday, I got an impression that investors should not expect any turn around until Q2'08 if it actually happens(not a sure thing). So, SCSS is dead money at best and more downside from here on. Looking at the chart this morning, it's evident that the company is buying back shares at $12.00. But I don't think it will be successful. SC management expressed during CC that they will be careful about spending the company's cash on share buy backs. At $12, a very generous price, the company is indeed returning the money to investors - those who wants to get out before more damages are done to their portfolio.
You have been right on this one, and thus far I have been wrong. Thus far I am down more than 10% on this stock and that is AFTER averaging down.
Nonetheless, I continue to "believe" in the product, the business model, and the market. SCSS continue to make a lot of money and at 6x EBITDA, there really isn't that much of a reason for this stock to fall.
Hopefully, we have lost most of the weak hands at this price. I suspect some margin calls and other short term impacts may cause this stock to bounce around for a few weeks, but after that investors will start to focus on 2008 and beyond.
I really doubt that the Fool will throw in the towel. At current prices we should see some value investors, vultures and private equity players taking a close look at the opportnity.
Don't forget all those shorts who still have to cover.