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Fidelity Loses $50 Million In Seconds On Its Brand Spanking New Investment, As Crocs Plunges On Guidance Cut: 2007 Redux?

Tyler Durden's picture




 

To anyone who is neither too young to recall, nor just got their first ever Bloomberg terminal a few days ago, CROX holds a special place in the heart since this perpetual momo stock, was without doubt the best coincident indicator of the market top back in 2007: the stock peaked just two weeks after the all time high in the S&P in October of 2007, only to collapse and never recover. Lightning may just have struck twice. Following an announcement that CROX cut guidance from $0.40, which was also the street's consensus, down to $0.31-0.33, the stock was halted for 30 minutes, only to reopen and plunge as much as 38% lower. The biggest loser? Not Paulson (for once), but Fidelity, which as the following chart from CapIq shows, decided to add 6.3 million shares in the Q2 quarter (having held nothing before), making it the second biggest holder. Oh well. There goes $50 million and some analyst's job. The biggest question, whether CROX part two is the same market peak signal that is was back in 2007 remains to be answered.

From the guidance cut:

For the third quarter of 2011, the Company now expects revenue to be in the range of $273.0 to $275.0 million, an increase of approximately 27% over the $215.6 million of revenue reported in the third quarter last year. This compares to the Company’s previous guidance for third quarter 2011 revenue of $280.0 million. For the third quarter 2011, the Company now expects diluted earnings per share to be between $0.31 and $0.33 compared to its previous guidance of diluted earnings per share of $0.40.

 

John McCarvel, President and Chief Executive Officer, stated: “Our business in Asia has continued to perform very well on the strength of our new product introductions. After a very positive response to our spring / summer 2011 product line in the Americas, we experienced some softness in our consumer direct channel in kiosk and outlet locations. Gross margins on a consolidated basis were slightly lower in the quarter than our initial expectations driven in part by lower direct sales as a percentage of total revenue.

 

“While we are disappointed with this guidance revision, we are very pleased with our year-to-date performance and believe that the Crocs brand has never been stronger,” continued Mr. McCarvel. “We remain focused on further penetrating new footwear categories and committed to building our market presence during the fall and holiday seasons. Looking ahead, based on current trends, we believe that fourth quarter revenue will grow in the low teen range on a percentage basis over the same period a year ago.

 

Mr. McCarvel concluded, “We are very pleased with the 30% increase in our wholesale backlog at the end of the third quarter which comes on top of a 37% increase a year ago. Building on recent product successes, we are expanding our translucent, Crocs chameleon, and sneaker collections as we head into Spring 2012. Impacted by macro economic headwinds in Europe, growth in our European business has slowed in Q3 and Q4 and is also evident in our spring/summer backlog for 2012. The solid backlog growth rate in Americas and Asia, provides key long-term building blocks to benefit from our increasing product breadth. In addition, our balance sheet remains healthy with record levels of cash and quarter end inventory levels that are projected to be down slightly on a sequential basis.”

Somehow we feel many more guidance cuts are in store...

CROX historical:

and top holders:

charts: Bloomberg and CapitalIQ

 

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Mon, 10/17/2011 - 16:49 | 1782841 Ahmeexnal
Ahmeexnal's picture

BTFD!!

Mon, 10/17/2011 - 17:03 | 1782918 Ruffcut
Ruffcut's picture

Anyone that buys such a stock and crox of shit,deserves a rubber shoe up the ass. 

regardless of fuckuations of the price and profit potential, any normal human should just say NO. make it a circuit city or something as useful.

Mon, 10/17/2011 - 17:06 | 1782928 ghostfaceinvestah
ghostfaceinvestah's picture

your 401k money at work.

Mon, 10/17/2011 - 17:55 | 1783011 Pladizow
Pladizow's picture

Company to shortly be renamed - Watacroc!

Mon, 10/17/2011 - 17:33 | 1783059 SilverRhino
SilverRhino's picture

Not mine ...

Mon, 10/17/2011 - 20:12 | 1783205 Don Birnam
Don Birnam's picture

The days of Peter Lynch are long since passed. Lately, always the bridesmaid, but never the bride...Sure, Fido has some of the lowest-cost index funds now -- about 20 years late, as indexing went out with Larry Summers in '01.

This isn't your father's FMR.

Mon, 10/17/2011 - 17:05 | 1782925 NewThor
NewThor's picture

What "YOU PEOPLE" don't understand is the brilliant visionaries of retail...

Laugh now, but using Rupert Murdoch's 'hack everyone' app, I've seen the plans and

blueprints for the new 2012 Hummer666 Obama Crocs that are sure to be the rage

amongst people with lots of dry powder.

They're made of diamonds, gold and unicorn dust and can call market tops.

Suck on that, haters!

love, 

NewThor

PS. did you know that by hacking every phone on the planet, you can get five kardashian butt loads of insider information? And it's not illegal, because hacking is illegal. Ah, the sweet irony!

Mon, 10/17/2011 - 17:09 | 1782944 Gubbmint Cheese
Gubbmint Cheese's picture

What do you mean, "You people"....

Alpha Chino (Tropic Thunder)

Mon, 10/17/2011 - 17:18 | 1782990 Mike2756
Mon, 10/17/2011 - 18:48 | 1783339 Jay Gould Esq.
Jay Gould Esq.'s picture

Tyler,

Fido is also a top-twenty [ bag holder ] in Green Mountain Coffee Roasters. -- Whoops, I'm terribly sorry. That one was down 11% this session.

The Big Green Pyramid is built on a foundation of nothing more than shifting mo-mo sands.

Mon, 10/17/2011 - 20:23 | 1783275 Use of Weapons
Use of Weapons's picture

Oh, the irony.

Odin -> Loki -> ?

It isn't Thor. It is Baldur, you fucking idiot. Way to miss the plays there boys.

And yes, that's a cosmic joke about to be played: when he rises, the earth will be green again. Not your phallic-centric-wet-dream-of-fighting I'm afraid.

Thanks for playing, Good luck, and Good night.

 

Oh, and the real version is: "Laugh now, but one day we'll be in charge".

http://www.resourcesforlife.com/wp/wp-content/uploads/2008/08/20091118we...

 

 

#OccupySeasemeStreet, /muppet

Mon, 10/17/2011 - 18:51 | 1783311 Gyro Gearloose
Gyro Gearloose's picture

Time travel has been proven!

Ahmeexnal comments two minutes before Tyler posts.

AMAZING.

 

 

Mon, 10/17/2011 - 20:57 | 1783711 covert
covert's picture

fantastic! lol

http://expose2.wordpress.com

 

Mon, 10/17/2011 - 21:24 | 1783764 Xrated
Xrated's picture

My Fidelity 401k is in treasuries. F the stock market right now. Guns and ammo, and silver and gold is my way of survival.

Mon, 10/17/2011 - 16:50 | 1782847 CClarity
CClarity's picture

Ugly shoes, ugly stock, ugly market. And down even further.

Mon, 10/17/2011 - 16:52 | 1782852 ss123
ss123's picture

People still wear these "shoes?"

Mon, 10/17/2011 - 17:23 | 1783020 Pladizow
Pladizow's picture

Stock price says ...No!

Mon, 10/17/2011 - 18:34 | 1783297 Bicycle Repairman
Bicycle Repairman's picture

Amazingly, yes.

Mon, 10/17/2011 - 16:53 | 1782856 LawsofPhysics
LawsofPhysics's picture

Hhmm, lots of institutional investors at fidelity.  could get interesting.

Tue, 10/18/2011 - 02:37 | 1784276 Tacos Rule
Tacos Rule's picture

From personal experience... no... it won't... those people are fucking idiots who don't budge until the prez is on TV saying we maxed out the fucking credit card AGAIN while never realizing we maxed it out 70 times in the last 40 years and it was just some sick political game that ended up backfiring on their precious markets.

So in summation I take back words four through six in this post, ignorance is pretty interesting to watch.

Mon, 10/17/2011 - 16:54 | 1782859 Irish66
Irish66's picture

wash, rinse and repeat.  damn ugly thingies but nurses wear them.

Mon, 10/17/2011 - 16:55 | 1782867 ReallySparky
ReallySparky's picture

I can not believe people actually wear those shoes.  I understand that they are functional for the medical community, with all the bodily fluids flying around.  They have taken them out of the three upscale specialty garden centers/horticultural stores in my area.  They have also disappeared from airport kiosks.  Surely the analyst could have seen this coming.

Mon, 10/17/2011 - 18:24 | 1783252 ceilidh_trail
ceilidh_trail's picture

Actually, crocs are banned in my 2400+ bed institution. Too much risk of body fluid exposure to the wearer. The nurses that I know that wore them loved 'em, but tptb decided they are too risky (I 100% agree) as it is common for all kinds of nasty to spill, and gravity heads it all towards the feet...

Mon, 10/17/2011 - 16:55 | 1782868 Mike2756
Mike2756's picture

Naah, they got stopped out, no problem!

Mon, 10/17/2011 - 16:55 | 1782869 Big Corked Boots
Big Corked Boots's picture

How can these guys not make buckets of money? They take ten cents of polymer, run it thru a molding machine, and sell the stupid things for $30.

Momo trader, momo fashion.

Tue, 10/18/2011 - 03:51 | 1784333 BigInJapan
BigInJapan's picture

Because any fool in China can, and does, as well.

 

Mon, 10/17/2011 - 16:55 | 1782870 Thorny Xi
Thorny Xi's picture

The orange and pink ones were popular in county jails, before budget cuts

Mon, 10/17/2011 - 16:56 | 1782872 phraseshifter
phraseshifter's picture

infidel!

Mon, 10/17/2011 - 16:56 | 1782873 DutchR
DutchR's picture

Uggs are next....

Mon, 10/17/2011 - 17:00 | 1782900 RacerX
RacerX's picture

Let's hope. They are clearly overdue for a lashing.. "Fugly"

Mon, 10/17/2011 - 16:59 | 1782891 TooBearish
TooBearish's picture

I s the Fido redemption phone line still open?

Mon, 10/17/2011 - 17:01 | 1782907 RacerX
RacerX's picture

"Is it too late to pull out?" :-D

Mon, 10/17/2011 - 17:05 | 1782895 slewie the pi-rat
slewie the pi-rat's picture

h/t to RT?

those inexpensive puts are getting harder to find...


Mon, 10/17/2011 - 16:59 | 1782897 vegas
vegas's picture

I guess they didn't follow that green arrowed line they always hawk on TV for their investors.

Mon, 10/17/2011 - 17:00 | 1782902 Do You Speak Greek
Do You Speak Greek's picture

LNKD, LULU, AWAY, CRM are next. 

Next 6 months will be a good time to be a put-buyer/short-seller/call-seller in the high betas...

Mon, 10/17/2011 - 17:03 | 1782915 ghostfaceinvestah
ghostfaceinvestah's picture

Agreed, CROX is a small part of it, I expect we will see a lot more of this kind of drop in the months ahead (look at NFLX for example).

I would add to your list CMG, that is a name I am looking to get short soon.

Mon, 10/17/2011 - 18:35 | 1783303 Bicycle Repairman
Bicycle Repairman's picture

Where's Robo?

Mon, 10/17/2011 - 17:01 | 1782903 ouchtouch
ouchtouch's picture

I have three pairs that I bought at Costco for a very low price after the last CROX crash -- I've been waiting for another crash to stock up again.  I wear them everywhere.  Also have matching ones for my kid.   I love them but they are not worth the crazy retail price they are trying to charge.

Mon, 10/17/2011 - 17:03 | 1782919 Kreditanstalt
Kreditanstalt's picture

For those of us too old-fashioned, too lazy (and too disinterested in this consumer shit) would you please tell us the actual name of the company?  "CROX" means nothing...it's just another craps counter.  (And I full realize that that's what EVERY company now is).

Mon, 10/17/2011 - 17:19 | 1782992 Mr_Wonderful
Mr_Wonderful's picture
Crocs, Inc.
Mon, 10/17/2011 - 23:52 | 1784094 Bear
Bear's picture

It's all a CROX anyway.

Tue, 10/18/2011 - 00:34 | 1784153 Kreditanstalt
Kreditanstalt's picture

How many of you actually buy any of this stuff anyway?  I mean, @$50 plastic footwear made in China...

 

Mon, 10/17/2011 - 17:04 | 1782922 RacerX
RacerX's picture

btw UGG brand = DECK (Decker's Outdoors). On the Naz.. not the pinks.. at least not yet.

Mon, 10/17/2011 - 17:09 | 1782946 ghostfaceinvestah
ghostfaceinvestah's picture

DECK is another stock I expect to get cut in half before the year is out.

Mon, 10/17/2011 - 23:19 | 1784036 tekhneek
tekhneek's picture

Almost makes me think shorting BlackRock's top 20 is like a greatest hits list in some sick, twisted, contrarian way.

Mon, 10/17/2011 - 17:08 | 1782938 oogs66
oogs66's picture

the only ones beating earnings handily are the banks - on the back of DVA!

Mon, 10/17/2011 - 17:14 | 1782974 buzzsaw99
buzzsaw99's picture

Blackrock. heh heh

Mon, 10/17/2011 - 17:30 | 1783048 ZeroPower
ZeroPower's picture

I think the drop is overdone - 0.40 old guidance vs 0.31-0.33 warrants nowhere near as much of a drop as what a/h session is showing.

Dont get me wrong regarding chasing a momo POS, but assuming it was 'faily priced' at 27 with those earnings expectations, the $10 drop is quite steep.

Mon, 10/17/2011 - 17:31 | 1783055 gwar5
gwar5's picture

I got the last of my McFido (of the clan McFido) money out of there last month.... after nearly 20 years with them. So sorry McFido, but there can only be one.

Mon, 10/17/2011 - 17:34 | 1783066 spiral galaxy
spiral galaxy's picture

Tyler!  Many thanks for your website and salvaging my sanity.  A true breath of fresh air in the atmosphere of incessant media hype & bs.  This article being another case in point.......kicked off today with ZH's Citi's Bloodbath report......in stark contrast to the buffoons on CNBC trying to decipher CVA and all other acronyms to get to the 'actual' earnings.  Many thanks and keep up the good work! :-)

Mon, 10/17/2011 - 23:26 | 1784049 tekhneek
tekhneek's picture

I just wish ZH produced video as its reports sometimes, too.

Wear a Guy Fawkes mask for all I care. Just read me the wit and realism of Durden... hand me a beer and I'm good.

Mon, 10/17/2011 - 17:34 | 1783067 spiral galaxy
spiral galaxy's picture

Tyler!  Many thanks for your website and salvaging my sanity.  A true breath of fresh air in the atmosphere of incessant media hype & bs.  This article being another case in point.......kicked off today with ZH's Citi's Bloodbath report......in stark contrast to the buffoons on CNBC trying to decipher CVA and all other acronyms to get to the 'actual' earnings.  Many thanks and keep up the good work! :-)

Mon, 10/17/2011 - 17:36 | 1783076 wang (not verified)
wang's picture

I love my CROX, have a lifetime supply of the original Made in Canada versions. When they offshored the production the quality as in fit / shape changed.  Never understood the runupdownup in share price

Mon, 10/17/2011 - 17:36 | 1783078 NotApplicable
NotApplicable's picture

Sorry, my fault. I just never got around to getting a pair.

Mon, 10/17/2011 - 17:37 | 1783083 adr
adr's picture

I wondered what happened to Crocs when I had to leave work early. The news isn't as bad as I thought it was after seeing the stock.

I remember back in 2001 one of my Taiwan contacts brought me a pair of shower sandals from China and asked if there was a market for them here. The price was $.62 a pair landed. I showed them to a few buyers and they all told me they wouldn't buy them in a million years.

A little while later some women started wearing foam shoes from Colorado. Turns out some guy in Colorado added a ankle strap to some Chinese shower sandals and claimed he invented a new product. All well. I even had some buyers tell me  guess I should have bought those things you showed me a couple years ago. I was going to have a $14.99 retail on them, I guess I should have gone straight for $30.

Alas that is Crocs, a crock of shit product made for less than $1, sold for $30. Just like Coach they captured the market of idiot women that think PRC is a high class suburb of LA.

Mon, 10/17/2011 - 20:29 | 1783648 cocoablini
cocoablini's picture

This comment  is so rife with insults, sexism and rascism and unfortunately dead on.

Crocs? really? who would buy that crap when you can go to any Asian knick knack place and get some dumpy-looking sandals for 4 bucks.

Plus, they make everyone look like dorks.

Mon, 10/17/2011 - 17:40 | 1783091 ghostfaceinvestah
ghostfaceinvestah's picture

Check out some of the other holders - while Fidelty was a top holder, this wasn't their top holding.  Not true for Standard Pacific Capital - according to BB, this was their top holding as of Q2.  And someone will have to pay 2/20 for that kind of skill.

 

http://www.bloomberg.com/news/2011-08-02/standard-pacific-capital-holdin...


Mon, 10/17/2011 - 17:40 | 1783095 mynhair
mynhair's picture

Vanguard, too.  Isn't that their 4th bust in a month?  And that Cramer fund....

Mon, 10/17/2011 - 23:51 | 1784089 Bear
Bear's picture

Groupthink = ClusterF..k

Mon, 10/17/2011 - 17:41 | 1783098 TheLooza
TheLooza's picture

i guess the shoe is on the other foot now 

eh, fidelity, eh?

 

 

Mon, 10/17/2011 - 17:56 | 1783152 ThisIsBob
ThisIsBob's picture

Trade had a lot of holes in it.

Mon, 10/17/2011 - 18:05 | 1783187 buzzsaw99
buzzsaw99's picture

this is what happens when a stock turns from growth-momo to a value play.

Mon, 10/17/2011 - 18:08 | 1783196 El Gordo
El Gordo's picture

Forget about the buyer - who was the seller?  An insider?

Mon, 10/17/2011 - 18:54 | 1783364 Quantum Nucleonics
Quantum Nucleonics's picture

I'll be generous and speculate that Crocs got added to some index and Fidelity had to buy it.

Mon, 10/17/2011 - 20:19 | 1783622 monopoly
monopoly's picture

6 million shares of a stock that sells sandals. A stock that went from 70 to 2 dollars. In this economy when many cannot even pay their electric bill. What kind of an IQ do these portfolio managers have. And Fidelity. I thought they had some brains.

Mon, 10/17/2011 - 20:23 | 1783633 Money 4 Nothing
Money 4 Nothing's picture

This is Bullish.. right?

Mon, 10/17/2011 - 20:27 | 1783643 AndrewCostello
AndrewCostello's picture

And whose money did Fidelity lose?

 

All their clients with life insurance policies, redeemable bonds and savings bonds.  That's who.  This was yet another case of rob the poor to give to the rich.

 

Read:

http://www.amazon.com/Simple-Wealth-Mr-Andrew-Costello/dp/1463523017/ref

Mon, 10/17/2011 - 20:42 | 1783676 Fix It Again Timmy
Fix It Again Timmy's picture

Rebrand to iCrocs and then to the moon, baby!

Mon, 10/17/2011 - 21:01 | 1783714 Justaman
Justaman's picture

The fund company mentioned in this story had a guest speaker on a conference call today suggesting that investors consider...wait for it....home builders.  HAHAHAHAHAHAHAHAHAHAHA!!!

Mon, 10/17/2011 - 22:19 | 1783869 GFKjunior
GFKjunior's picture

I wish I had a Bloomberg terminal.

Tue, 10/18/2011 - 01:01 | 1784188 ArsoN
Tue, 10/18/2011 - 01:04 | 1784192 ArsoN
ArsoN's picture

never mind.

Tue, 10/18/2011 - 02:24 | 1784266 Tacos Rule
Tacos Rule's picture

After a life of food industry work I threw my hat in with "investment firm" since I enjoy these lovely markets so much in my personal life, and I thought I could actually help people with their money which they are so poor at handling themselves.

I made it 15 months before I walked out, in hind sight I'm impressed I made it that far.

Retail you can draw your own conclusions about if they are right for you as long as you control the account and don't let them manage it, but institutional is a fucking joke and they just rape people from their 401k side and shitty mutual fund offerings.

Since I used the term "investment firm" they can't sue me due to that thingy I signed when I was hired, I think... don't tell on me haha...

They missent an email to my group of Q2 results this year... cool $6 bil PROFITS as their customer's accounts bleed money day after day (prolly get sued for that one though).

Anybody else ever notice over the last ten years a large portion of their mutual funds have the same wave form as a fucking index fund but with slightly higher or lower amplitudes?

https://guidance.fidelity.com/viewpoints/vp-inside-out
I like to watch/read what places like this put out since a lot of people seem to believe their hype.  I enjoyed Tom Soviero talking about some high sounding bullshit then touting China.  He manages FLVCX and a quick glance at the last ten years (granted he took it over in 2003) backs up my former statement of mutual funds following the form of the indices.  They should've fired this fuck and given me his job, I would do it for 5% less and since they don't seem to give a shit what long term performance looks like, it would be a win-win for me and "investment firm."

Yeah, I'm a bit jaded.  Fuck "investment firm."

Tue, 10/18/2011 - 02:33 | 1784273 monkeyboy
monkeyboy's picture

Hell of a run since the 2008 lows...though hell of a drop since 2007 $70 buck highs. Reminds me of the halcyon Krispy Kreme days.

Anyone try trading CROX?

 

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