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Under Armour, Inc. Message Board

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  • bearofbleecker bearofbleecker Mar 2, 2007 6:34 PM Flag

    ua shoes

    Well, I'm back from Hawaii and glad to hear that you got out even, Montereyguy. I was watching Goldman Sachs lanquish, decided that something was up, and sold everything that wasn't nailed down and bought treasuries just before the 400 point implsion. Unfortnately, the treasuries didn't get bought until a day later and I entered the big tank day with just a few measly short positions. Still selling LVS, WYNN, plus SHLD, MER and GS. Sell a little UA for old time's sake whenever it sticks its ugly head up. It doesn't look like it's got a lot of sponsorship these days. I wouldn't be shy about coming back for seconds if it stays below 45 Monday. Granted, on days like today you can short almost everything. But stocks like GE, HPQ, and JNJ start to stablize in these environments because institutions need to own them. They were trying to hold UA up with phony bids toward the close today, but there were a lot more real sellers eager to get out. Looks like they don't want to put any more money into this one. By the way GS and MER are behaving -refused to bounce - I'd say there are real problems there, whether with mortgage-based securities or the yen I wouldn't know. The nice thing about shorting major stocks like these is that when they get going in one direction, they're like an oil tanker -- it takes a while to turn them around. With a little runabout like UA, a couple of thousand shares can whip it right around. Have a good weekend.

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    • Welcome back!! glad to have you back..
      you said you wouldnt mind coming back for seconds if it stays below 45...are u saying u go long or re short at this level?
      if indeed this recession talk and end of the world stuff comes true, its going back down, but I would not be surprised to see another run up..? whats ur take?

      • 1 Reply to monteryguy35
      • I think that in this kind of market it's going to be hard to get a head of steam under this thing unless the large holders support it actively, and right now I think they have bigger fish to fry. If they come in before the open and buy the few odd shares that are being offered to make it open higher - a regular gambit with UA - no one is going to fall for it in this market. And I will cheerfully sell them some. A lot depends on who you think the real shareholder base is. In junky stocks like this, the retail investor reassures himself by saying, "Big institutions love this stock." But unless they keep their stock certificates in a safe deposit box or under the mattress, the retail investors' shares are listed as being held by an institution - their brokerage house - so it's hard figuring out who really owns the rather small float of UA. (Obviously,some of the real major holders also have hedged their positions.) I think that, aside from Fidelity, there aren't a lot of major funds committed to it. There are a couple of investment banks who actively support the stock price, largely for the benefit of their insider clients, I think, who still have large chunks of stock they want to bring to market. I also think that these houses had to buy a lot of UA to hold it up in the face of a very disappointing earnings report. So let's assume that these guys now own a lot more UA than they'd like. Locking up the float- willingly or not - obviously gives them the ability to squeeze the shorts, which is where they've made their real money on this stock. But I think that game is over for the time being. If the overall market continues to swoon and the retail investor gets nervous, Thomas Weisel and the others will have their hands full just decelerating the drop. And if the market dips to the point where people start to cash in their shares of the Fidelity Contrafund, for example, these redemptions will trigger selling which could drop this thing dramatically. But that would require another 5% drop in the S&P, I think. So, until the market turns decisively, I would continue to short this on an in-and-out basis. Remember, you won't get those 1 point morning bounces to sell into like the old days. And a 1,000 share sell order may stop any advance in its tracks. So you have to be gentle. On the other hand, mangement isn't going to waste one of their stock puffing releases ("UA Signs Junior Tetherball Team to Exclusive Contract!") on this kind of market.
        Finally, even though I think UA is worth about $20 a share, there are probably better stocks to short here.
        Sure, UA was down about 2.5% Friday, but Nike was down over 2%, too. And the financial stocks - brokerages in particular - are the ones with real downward momentum now.
        The only reason I continue to short it is pure spite: I lost so much money shorting it last year, I feel I have to get some back. And if it drops 2 points in a day, I would hate not to be there. And, in the past, where I've been beaten up shorting a stock which clearly seemed overvalued to me - PFCB and XMSR, for example - I've made a lot of money when the chickens came home to roost. Don't overcommit to a short position here, though. When this thing starts to go down in earnest, you will be able to short it again and again profitably because the true believers will bounce it again and again. By the way, I don't doubt that UA's sales are basically fine, which is why it's worth $20 a share rather than $12. Monday morning, if the Nikkei has dropped more than 1/2% and particularly if the DAX and CAC don't recover either, you can short UA, the S&P, or anything else you fancy. The Europeans have stronger economies and stronger currencies than we do right now and they're going to have to rally this market.

 
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