Heelys one month after crash

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I normally don’t participating in stock discussion forums. But this one titled “company and stock did not connect” at Google Finance caught my attention a month ago. So I went ahead and commented:

Original comment: why is the good performance of the company disconnected from the horrible performance of the stock? When a company is more profitable than its previous quarter in the previous year, the company is more valuable. Anyone have any ideas?

My comment on Aug 16: The problem with Heelys is its prospect. In stock we not only look at its past, more importantly, we look at its future. With Heelys, the future is not clear (at best), not so good (in reality).

The inventory issue is not isolate problem. Their sales people may have pushed too agressively with the retailers for the “back to school” season. Now their typical strong Xmas sales is at risk.

From demand side, whether you like it or not, most kids already got a pair (if their parents can afford), so the growth will slow.

And here is another guy’s response, regarding my “demand” comment:

Yup… it’s too bad that…
– Kids feet stay the same size.
– Kids keep their shoes nice.
– There exists no source for new kids.
– Parents and kids like to buy used sweaty shoes to save money.
– Most kids already have a pair of Heelys.

Yup… too bad all those statements are true.

BTW, the stock (HLYS) went from 13.xx to 7.xx in a month. I’m not saying I’m happy that I got it right this time (I also lost money on this one). I think one important thing in investing is: be open minded. An “appears good” stock could turn bad very quickly.

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