Let's think about why SWHC might be releasing earnings so early. Could it be that they needed to get it out of the way for another reason? Is a private takeover looming? I'm curious to hear theories from others on why they would release earnings so early.
I think there was a slow leak occurring so they had to prerelease the information to get it out to one and all. Pretty straightforward explanation and it fits with the stocks trading pattern.
Maybe - maybe they want to buy back shares at $10 BEFORE the full announcement and its increased guidance and other info. hmmm I am NOT selling at $10. That is the price company management is BUYING at! June 25 is still going to be a very interesting day!
Reuters corrects headline today to say company estimates, not reports, Q4 revenue; Adds link to press release) June 13 (Reuters) - Smith & Wesson Holding Corp : * Sees Q4 2013 GAAP shr about $0.44 from continuing operations * Reports record preliminary fourth quarter and full year fiscal 2013 net sales and net income. This is as I thought, this was normal preliminary net sales and earnings per share estimates just like they have done several times and as do other companies.
I've been hearing about preliminary earnings coming out for the last couple weeks and I don't understand why people are surprised today? Last year on Mon May 21, 2012 SWHC released preliminary earnings and today's report was also called preliminary earnings? If you Google SWHC and preliminary earnings report there is a pattern and it has been done many times. Am I missing something?
I think you are comparing two different things. I did the Google search as you recommended. They announced preliminary net sales in May 2012, NOT earnings. Furthermore, when they announced earnings last year on June 28th, the stock jumped 15% in after hours trading. I don't think it would have jumped 15% on June 28th if folks knew the number in May.
This is different. MUCH different. They have basically told everything related to earnings almost two weeks early. Why? Seems odd to me.
I would love to hear more theories/thoughts on this topic. Could it be they are doing what they can to drive the stock up to fend off a private takeover? Maybe there are rumblings of a potential pursuer?? Having said that, I am still amazed the stock has stayed this cheap for so long. Their annual sales almost equals their market cap. That is crazy cheap. Sure seems ripe for a private takeover to me.
Curiously, SWHC is doing this in a way that is least hurtful for the shorts. By buying directly from their institutional holders, they are buying shares which are not very available in the open market. Therefore, the buy-back does not much reduce the size of the pool of shares from which shorts might buy (to cover their positions). It may be that the institutions prevailed upon them to do it this way because the institutions wanted to sell and hoped to avoid driving the price down if they sold in the open market.
I think you are misinformed. Maybe from the "datbe" joker. The shares will not be bought solely from institutions. He's mixing up the share buyback with the bond offering. He's probably making that mistake to mislead others. I advise not listening to him.
FYI: They did NOT pre-release last year. They released last year on June 28th and the stock jumped 15% in after hours trading that day. Someone had posted they do it every year. Apparently NOT.
I think the most likely possibilities are:
1) News of the debt exchange and share buy-back was leaking (perhaps some SWHC management leaked to family / friends, or the involved institutions leaked). So earnings were released early to protect those who leaked.
2) There may be an acquisition imminent and management wanted to pump up the price of the stock beforehand. For the sake of those long this stock, I hope this is not the reason because I think an acquisition will be to the detriment of SWHC shareholders
3) Management wanted to help some institutions or individuals who option positions which will expire Jun 22.
One is that this effected the stock BEFORE options expiration, rather than after. HMMMM
Also - it may be that info was leaking and this CEO did the obvious.
They may want to buy the shares cheaply ($10) before releasing guidance later this month.
PERFECT moves by the CEO! Borrow cheaply and get a MUCH higher return by buying back stock.
I think this could hit $15 yet this year. CANNOT wait for full announcement to get better guidance.
Shorts are so screwed!!!!!!
I was shocked about the early announcement also. Going to mean nothing but good news with 11 million shorted shares. 9 days to cover will mean this puppy is going to fly for the next two days while shorts cover.