Just to be weird, I predict a surge. Bad news all out. Still, cash drain could kill this well before a turnaround. They've made some good moves, but confidence? Very little in this company any more. At least Georgia's gone, but that doesn't mean anyone better has replaced her.
Is the best we can hope for a buyout?
All of their stores have been eerily empty. When the new product line comes out we'll see what the future looks like.
I just feel sorry for the people who have been patient from the $4-$6.00 range and continue to watch their money erode. I bought at $2.77 and sold at $3.08, then I rebought at $2.84 and resold at $3.06. However, I then rebought at $2.84 again, so now I am a bagholder in this newest crash. So I have made some money along the way and am better off than the people who have been hit in all 3 crashes. But still... not fun.
I should hope the bottom would be no lower than 2.75 today and it could bounce back to 2.90. The bad news was already built into the price when it reach 2.74 and lifted a bit with the two executive changes announced in Jan., knowing that it could not get any worse. There was no hope to change the last quarter, too late. The stores seemed a bit better in the last few months, but not enough time to change the styles or selection. The selections and styles have been upgraded and will continue to get better. If we are lucky, it can only get better from here.
I believe last night’s AH action was unwarranted. People jumping ship and allowing a few longs to cover, this caused a further drop. As you stated, we could see a little lift today from the 2.75 range, but don’t hold your breath. I also don’t think a buyout or takeover is in the future. Our Executive Leaders will have to correct this one on their own.
Just because they're unprofitable doesn't mean no one would want to buy them out. It's all about perceived value to a possible purchaser. With things not looking so great right now, if someone offered you, say...$4 a share, $5, or $6 would you take it? I would. Would you have taken that a year ago? No. Unless there are more international disaster and oil goes through the roof, retail will come back strong. The people in this industry know that. It's like steel, real estate, or any other industry that has a future, when a company screws up and falls down the vultures swoop in.
I guess if someone buys them out all the high salaries and bonuses are still payable to upper management. Hugh surprise.
A buyout won't happen. Private equity firms want to buy companies that are undervalued and are consistantly profitable. This one is niether-nor.
With regards to a bottom, I think book value is $2.49, plus or minus a few cents. That should be the bottom. If the stock falls much further than that, WATCH OUT! The next technical level isn't until $2.00.