The warning signs of Crocs

Crocs (CROX) lowered its Q1 number yesterday. I sold all my CROX shares a while back after its Q4 earning announcement, because I thought the fundamental is still bad, not to mention the potential cash flow problem I talked earlier.

Since I am talking about the financial media lately, I think one really does not need to know accounting or finance to figure out CROX will fail. Just look at the following two things from media recently.

1) Crocs per capita (a fancy name for the average dollar spending per person), this is shown in its Jan. ICR Xchange conference. My initial thought was it is quote innovative for them to come up with such a cool name. But looking back, isn’t it a typical wall street trick to get people excited? We have heard the Home Inns said “China top 10 hotels has 6% of market share, US top 10 hotels has 60% of market share” back in Oct. 2006. We know what happened to HMIN now.

crocs_per_capita

2) On March 6, Crocs said that Cosco has not been authorized to sell Crocs shoes, amid some reports that Crocs showed up in Cosco stores. This is a classical “此地无银三百两” story, or “trying too hard to hide something too obvious”. Because Cosco is a discounter, Crocs tried to say that its products are still in fashion, and their products will not be sold at Cosco. While on the other hand, savy shoppers know one can buy Crocs classics at under $20 at shoes.com (MSRP 29.99).

The story of Crocs is about to end, hopefully we can all learn a few things from it. At least I did :-)

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