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Lemelson: Skechers Still A Short After Losing A Third Of Its Share Value

Lemelson: Skechers Still A Short After Losing A Third Of Its Share Value
  • Shares of Skechers USA Inc (NYSE: SKX) plunged more than 30 percent after the company's third-quarter top and bottom line fell short of expectations.
  • Rev. Emmanuel Lemelson, CIO of Lemelson Capital Management, told Benzinga on September 25 his fund is short the issue at an average (adjusted for a 3:1 stock split) cost of $132.
  • Lemelson told Benzinga on Friday that the stock may still have further downside.

Shares of Skechers plunged more than 30 percent after the company reported a disappointing third-quarter results. The company earned $0.43 per share in the quarter-on-revenue of $856.2 million while analysts were expecting an earnings per share of $0.55 on revenue of $876.54 million.

Rev. Emmanuel Lemelson has been short the stock since at least August.

On August 12, Lemelson told Benzinga that the stock has a "wild" valuation and that any "bump in the road" will affect the popularity of its products. Accordingly, the stock is vulnerable to a "precipitous fall."

On September 25, Lemelson reiterated his short position and said that the stock is still "radically over-priced." The investment manager argued yet again that the company's products is a "fad" and his firm will continue to short the stock.

Lemelson stated at that time his average short price (adjusted for a 3:1 stock split) is around $132.

Following the company's earnings release on Thursday, Lemelson said the more than 30 percent decline in the stock was "totally expected." In addition, he is now valuing the stock in a range of $13 to $20 per share on a sales and cash flow basis.

Finally, Lemelson reaffirmed that the stock is still a short opportunity, although "not as good as it was before 5 p.m." on Thursday.

Shares of Skechers traded recently at $30.43, down 34 percent.

Latest Ratings for SKX

Apr 2020Deutsche BankMaintainsBuy
Apr 2020Morgan StanleyMaintainsEqual-Weight
Apr 2020UBSMaintainsBuy

View More Analyst Ratings for SKX
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