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Deckers Outdoor Corp. Message Board

  • myitcareer myitcareer Mar 2, 2013 9:49 PM Flag

    As of Feb 15, 13 + million shares short, total about 35 million floating

    As of Feb 15, 13 + million shares were short and the total amount of shares outstanding was about 35 million. Does anyone know if there is a way to figure out how many out of those 13 + million shares are now covered? One thing is for sure, the shorts were betting on a bad earning release and they did not get that. 9 million shares were sold and bought on Friday, the only day (other than the after hour trading last Thursday) the shares were traded after the earning release. At least there are still 4 million shares short. And with the sales getting steady and profit margin improving, many people who sat on the fence are now willing to buy, and they probably were responsible for a significant part of the 9 million shares bought last Friday, and will continue their purchase in the next week or so. In other words, there may well be way over 4 million shorts out there, maybe up to 10 million. They want to cover, unless they are really stupid. Coupled with more people who want to buy, the demand for the shares will be much higher than usual.

    On the supply side, those people who sold last Friday were most likely short term players, or nervous longs who want to take some chips off the table. Those longs who did not sell last Friday are not going to sell because they are probably here for the long term. So the supply is limited.

    I do not look at the short term supply and demand but focus on the fundamental and valuation, but I am afraid the shorts are screwed (except those shorted at much higher prices). Even without a short squeeze, the balance sheet, the total revenue, the earning power, and now the relative stability of the earning (at least for the next 12 months), and above all, the popularity of this unique and iconic brand, should give DECK a capitalization at least $2 billion, which is $55 per share.

    Anybody who disagrees with my analysis is welcome to post your thoughtful critique here. Please provide specific reasons for your conclusion.

    Sentiment: Strong Buy

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