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Deckers Outdoor Corp. Message Board

  • cwebjohn cwebjohn Oct 31, 2012 9:40 PM Flag

    Bought more shares

    I bought more shares today...

    Valuation metrics are quite interesting at this level. With the avalanche of shorts invested I am curious what would happen to all of them if the rug was pulled out from under them.

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    • Funny, b/c I'm using this bump to reduce. This Co. is a play-toy of the short lobby...and that won't change, b/c they are forcing Deck's hand here, either with 1) a greatly reduced valuation that makes continued shorting risk-negative (and imo it's not there yet, as evidenced by a) the terrible fundamentals of the Co. via its huge mis-steps, and the notion that it's #1 product is under-going a de-fashioning. Management gave no indication that, indeed, this wasn't the case. Look at the inventories here, some 1/2-billion dollars of Uggs sitting idle. That's half of the market-cap of this Co. Honestly, that's idiotic for upward appreciation in PPS. Then you have the share-buy-back at x2 the current PPS, that's idiotic. Then you have them building a new $30-million dollar HQ, all premised on the notion that they are a "billion dollar Co."; I think this shows that "fashion went to their head"! It inflated their egos, and gave them a false sense of "what they're really dealing with", which in essence is a "one-hit-wonder" whose target demographic is one of the most fickle, un-reliable markets in foot-ware, teens and tweens, who mainly buy Uggs b/c they are perceived to "be cool-hip and fashionable". Ask yourself this, what else does Decker's sell that makes them a "billion dollar company"? Answer, nothing, not Sanuk, nor Teva, and the other brands aren't even worth mentioning! Who has even heard of them here in the USA?

      ....Forcing Deck's hand by actively seeking a buyer, but I can't see that with its current valuation, and here's why:

      I could see someone maybe trying to buy this company, but not at the current valuation! This Co. is a take-over target at $500-million, not $1-billion, in my opinion! Also, the idea that Coach would be interested is scarey and indicative of the un-sophistication inherent in the retail investor here, who doesn't really grasp the challenge being imposed upon Deck (short lobby) or self-imposed upon Deck (by faulty business practices and deteriorating business!)

      People talk about this being a 'life-style brand", but 75% of its bread-and-butter in built upon a "seasonal, trend-fashion brand" that is losing its "fashion-ability"!

      Just my thoughts, but I'm not a big believer in this Co. right here right now. I'm a distressed long hoping to recover funds. I hold a core position hoping for a better exit price.

    • Agreed. Buying at these levels will prove to be a profitable wager in the coming months.

60.81-0.24(-0.39%)Oct 12 4:01 PMEDT