Croced and Loaded

Just a quick follow up on last week’s introductory Crocs Inc. (NASDAQ: CROX) postings. I was able to track down a pair at a sports store in Gothenburg, which coincidentally was having the first day of its annual ski clearance sale. So not only did I walk out in my new Crocs shoes/sandals, but I also walked out with new skis for next season! Great deals all around, except for the Crocs, which I think cost around $90, which is crazy for a 6-oz piece of rubber. But it does go to show what a phenomenon these things are set to be. Actually, I think they are probably already be going viral, since the company is producing 2 million pairs per month (according to the 18 April article in the LA Times, which by the way was syndicated to newspapers across the U.S.A. this weekend) and still most people have never seen or heard of them. Continue reading this post for more info, pics, and analysis.

Below are pics from the Swedish shop where I bought my Crocs. The store a full window display outside and a full wall display inside. Most of the employees were wearing Crocs. Note: The guy you see on the Crocs poster is a Swedish hockey star… and the Swedish hockey team won the Olympic Gold medal this year. Nice.

While there are many items of interest going on with Crocs Inc., such as new patents, new designs, new pro volleyball deals, new markets, etc. one thing that really jumped out at me on my first initial scan of the Yahoo Finance Key Statistics Page was the short interest. Here are the numbers (sources are NASDAQ website and Yahoo Finance):
What do I see in these date? In the 20 trading days from 15 February to 15 March 5.3 million shares of CROX were sold short at a volume-weighted average price (VWAP) of $26.62. That 5.3 million shares represented 25.3% of all of the 21 million shares traded during that time period and likely contributed to the stocks 14% decline.

Now, however, the stock price is about $27, or 1.4% above the $26.62 VWAP of the March shorts. What that means is that on average the Feb to March shorts are underwater by 1.4%, assuming they have not yet covered. That’s within most people’s margin of error on a trade and certainly well within most people’s pain threshold, so no big deal for now.

Another interesting nugget is the fact that the 6 million shares sold short as of 15 March represent 16 days of trading based on CROX 10-day average volume or 11 days of trading based on CROX 20-day average volume. That’s a pretty significant short-ratio.

What these statistics mean to me, assuming there’s no anomaly in them, for example because the stock just came public, is that there could be some serious short covering in the offing, say if the company reports a blow out quarter when it makes its first ever quarterly earnings announcement as a public company. The exact reporting date is expected to be announced later this week, with the actually report expected the first week of May (on or around 4 May). We will see.

One final note regarding the above short-interest statistics: They are a month stale right now. The next report is scheduled to be disseminated 25 April and published 26 April. Depending on what that report says, there definitely could be some volatility up or down, although the real volatility around CROX may not show itself until the earnings news.


Index of my recent CROX postings
Crocs on

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