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LeapFrog shares rally after Black Friday ad panic

NEW YORK (AP) -- Shares of LeapFrog Enterprises Inc., which makes educational toys, rebounded Tuesday after a big slump Monday.

THE SPARK: Roth Capital Partners analyst Elizabeth Pierce said investors may have been misinterpreting a Black Friday ad released by Walmart. It showed a LeapPad Leapster 2 going on sale for $20. That's an older model, but investors may have believed it referred to the new LeapPad2, which sells for $99, Pierce said.

Walmart is the country's biggest toy seller.

THE ANALYSIS: Pierce said she does not expect to see any discounts on the LeapPad2, and her weekly research points to strong sales. She also predicts good demand for the toy during the holiday shopping season.

She has a "Buy" rating and a $15 price target on the shares.

SHARE ACTION: Shares of the Wayne, N.J.-based company rose 40 cents, or 5.4 percent, to $7.84 in afternoon trading. The stock slid 10 percent on Monday, and remains off 31 percent over the past three months.