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Skechers U.S.A., Inc. Message Board

  • muellerfund muellerfund Jan 30, 2012 8:04 PM Flag

    Volume has dried up since the

    slew of downgrades. We had a couple heavy down days during the most recent 2 downgrades, and then volume diminished during a slight recovery of the stock price. Thoughts?

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    • I would go on a rant about how terrible this stock is and how management has let us down.

      But, as a faithful investor I will decline to rant.

    • This stock, IMO, has a resident short(s) that are simply running it up and down. They appear to be making pretty good money at it, so who am I go say they are wrong. Below you will see in the middle of January when the volume spiked to the upside before the last short interest report came out. The numbers on that report showed a rise in short interest reported on 1/13/12.

      Just my two cent and a guess, but after the downgrades we likely saw higher volume covering, which has give the stock the support at around $12.

      I have posted along the same lines in the past, but I think it was before your arrival on the board. The 6 million share short interest remains rather consistent on this stock and it is my opinion that player(s) will make all efforts not to let this gravy train get away from them. They can sit back and pick up roughly $1 million bucks anytime the stock shows the slightest strength.

      Some points.

      1. The short side will not stop this until management releases some news that forces them kicking and screaming out of the position, the trade is just too easy at this point.

      2. Until management destroys the balance sheet (which to their credit, they have not done), there will be value investors that continue to try and jump into what looks like a great opportunity. The problem is the long termers here have seen many long side investors try and give up. The core 6 million share short position should have plenty of room in their profits to grind on the resolve of the new long side investors. We know this short position has been on for one year at least and for all we know it could be the same shares that were shorted in the $30 or $40 ranges.

      3. Management is not showing they can come with a new style that will generate revenues as yet, but I hope they have rid themselves of the problem inventory that started this mess and we do not see a repeat with another style that has died.

      4. Also notice that the analyst have cut 2012 estimates FAR under yours from another post and this is trading at roughly 26 times forward earnings, therefore IMO, this stock is only being held up by the book value.

      • 3 Replies to catch83sails
      • As to point 4, I see what you are saying on the analyst earnings estimate/P/E. I wonder where they come up with these numbers? Their numbers are 1/2 of what the real numbers were for 2008 and 1/2 of what the real numbers were for 2009, before the shape-up/toning craze. Why would the analysts think that SKX would do half as well in 2012 as SKX did in 2008 or 2009? I think that is way too pessimistic Then again, these were analysts who told people to buy and hold as the stock was near its top.....

      • As to point 3, yes, I agree that inventory on the Shape-up craze was not properly managed. This can happen, but I think what makes people especially leery when it happens with SKX, is that they remember the Greenbergs making similar mistakes with LA Gear--mistakes that helped to put nails in that company's coffin. The good news is that while they were late to move on from Shape-ups/toning, they did/are ultimately addressing it.

        As to coming up with new styles to generate revenue, SKX has come up with winning new styles. Just look at their website. Word is spreading about their running shoe technology. Come spring track season, kids all over the country will be buying shoes that a winner like Meb wears.

      • Thank you. Good info.

        So over 1 million shares short added from the end of DEC thru mid JAN:

        1/13/2012 7,240,877 1,034,878 6.996841
        12/30/2011 6,178,194 440,415 14.028119

        Roughly a 20% increase in shares short in that time frame, a time frame when the shares have been relatively low in price. I hear what you are saying about the possibility of much of apx 6 million shares being short from a long time ago and thus a built in profit buffer for those shares; however, for these most recent shorts--and a 20% increase is quite a lot--these are new and at a low price. They are definitely fuel for a short squeeze. They are late to the short party.

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