We still see people on here that think the high short percentage is an indication of something wrong. But IMHO, the posts on here tell the entire story. Shorts came in in droves because they seem to LOVE, LOVE, LOVE a good story. So here's my estimation of the story of CROX.
"Rubber shoes. That look like a cross between a waffle and Duck shoes. This is beautiful. Let's run it up to fake them out. Then when we tank it, it will be expected so it won't look suspicious."
But then there was a twist. The company started to build on its strengths. They made more shoes with different molds that looked more normal.
"This is even better! We can ride this twice as high, because everyone will think that there is a chance they will actually have staying power. But it doesn't matter how you cut them, rubber shoes are rubber shoes, and kids are fickle. This is going to be the next big story. The one that people tell when they talk about how far a stock can fall."
But those molds weren't where they stopped. Soon they started to produce realistic shoes, ones in popular designs with the same material. And they soon started building more out of them. Padding, clothing, and indications that there was more coming. And they began to join forces with other big names to raise their stakes. Names that gave those organizations an opportunity to get paid tons of money for simply allowing their name to be splashed across the shoe.
And the shoes became even more popular, not only in this country, but all over the world. Profit margins were huge, even with global distribution. And the crazy looking shoes attracted attention everywhere they went thanks to their uniqueness and comfort. They sold so well they had to increase production.
"This company is smarter than we thought. We're going to have to drive the price down ourselves. Before earnings hit, we've got to start spreading rumors that sales are inflated, that kids are disinterested and that the investment in production was a mistake. That the winter season and tons of knockoffs slowed down their sales. Make sure that nobody hears anything about international numbers, and for God's sake, make sure nobody thinks that they're selling their new lines. We have to change the story now."
But the story didn't change. It started to become more and more apparent that this product was moving beyond fad status. People of all ages who had no interest in trends were buying the shoes not for design, but because they were more comfortable than anything else on the market. Indications said that the new lines were extremely popular and well-received, and other countries started catching on to Crocs in the same way they did in America. Sales weren't decreasing, they were rising.
Even worse, the company's management didn't make a single mistake. There was no bad news to report. Every move they made was a step towards increasing growth and expanding their base. And the biggest shoe company in the world announced declining sales due to competition from casual brands.
And then the shorts began to panic. They began to realize that this company might not be a fad at all. They made efforts every single day to drive the price down, but as time went on, that became more and more difficult. They worked and worked to keep the story down, to make sure everyone still thought of them as the makers of those original, ugly shoes. They took advantage of every single sign of weakness to drive it down as far as they could. But everyday, they seemed to be unable to keep it down for more than an hour. So they tried to drive it down as often as possible to at least keep the price low and keep attention away.
I just recieved my first pair of flip flops (Crete's ) from Crocs.. Nice. My feet have never been so happy happy. This is our 14th pair.
Every time we go out to home depot , safeway, or wherever people stop us and want to know about our Crocs.
Have you seen the Disney Pirates of the Carrabbean (kids caymens) ??? So now, with the skull & cross bones. No wonder we have a winner, and for years to come IMO. Just upgraded to Strong Buy by BlondiesBestBets.
And that's where the story ends for now. Either a deus ex macchina will kill any chances of the stock going back up, or their hubris will get them stuck right in the middle of a classical tragedy, unable to drive down the price without people starting to ask questions about why a company with record revenues, a falling PE and PEG keeps dropping.
But either way, the shorts were wrong every step of the way. That part of the story won't change.