Market Overview

When Bears Attack: Kate Spade Selling Off After Low-Ball Offer From Coach


Kate Spade & Co (NYSE: KATE) shares are trading sharply lower by $3.40 at $19.39 in Tuesday's session. Investors are bailing out of the issue after it was reported the company would spend more time to negotiate the Coach Inc (NYSE: COH) offer.

In other words, the impending offer is nowhere near Monday's closing price ($22.80) where the accessories and apparel maker is looking for in a deal.

Longs trapped in the issue from much higher prices began selling in after-hours and premarket trading and have not let up. After a much lower open, it managed only a nickel bounce to $19.90 before continuing its move lower. So far, the follow-through decline has taken the issue to $19.17 and it is not far off that low.

Keep in mind, the issue closed $14.51 on December 27, when the initial rumors of a potential sale surfaced the following day. So far, the "Johnny come lately" buyers pushed the issue to a high of $24.18 on February 28. At this time, the 65 percent price appreciation at that level, may far exceed the amount Coach Inc. is willing to pay for the company.


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