Sunday, April 19, 2009

Death Cab for Crocs

24/7 Wall Street thinks that they're not long for this world.

Crocs (CROX) sold the fastest growing footwear in America at one point. In late 2007, the company’s shares traded at more than $72. Now they change hands at well below $2. At the end of March, Crocs got a six-month extension of a critical credit facility. According to Reuters, “Crocs Inc averted a cash crunch by winning an 11th-hour credit facility extension with a California bank, but analysts say the jury is still out on whether the struggling brand can turn around.” Two weeks before the credit extension, the company’s auditors gave the firm a “going concern” letter, an indication that there would be reasonable chance that Crocs would make it another year. In the fourth quarter of 2008, Crocs lost $43 million after making $55 million in the same period the year before. Revenue fell from $225 million in the last quarter of 2007 to $126 million. Crocs won’t make it through the year.


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