REDE Trade Update - the envelope had coal inside...
biz.yahoo.com
RedEnvelope CEO Resigns; Company Sees Loss for Year, Sending Shares Down 22.2 Percent
I am not sure what the low was in AH, but I grabbed some at ~$8.10 b/c this seemed like a huge over-reaction given that the activists got what they wanted. We'll find out tomorrow if it was an over-reaction or not. What can I learn from this? Two things. First, yet another earnings play that went the wrong way as they did almost every time in 2005. Duh - maybe I should stay away from these. Having said that, this was a small play for me. So, the risk was pretty small. Second, I frequently ignore the "you should never ave. down" edicts. Some times it works, e.g., DESC and TSCM are two examples stocks where that worked well. OTOH, SGTL is a prime example that d/n work well - at least not to date. Check back for the next status update to find out if ave. down worked or not.
Responding To Message #158 from Rutgers at 1/23/2006 4:23:49 PM
Trade Alert - and the envelope please...
Purchased a little REDE today at ~$10.35. Insider purchases (including CFO at approx. $12.40/share on Nov. 8th, which was close to 1/2 way through Q4) and activist filing SEC 13D (see recent Barron's squib below) from the Founder. Looks like a fairly low risk at this level. Stay tuned - earnings after the bell tomorrow night (Jan. 24th). Obviously, the action today doesn't bode well for tomorrow's earning's call. I have vowed to stay away from earning's plays this year b/c of my awful performance on those stand-alones last year, but for the reasons outlined above.
RedEnvelope founder Scott Galloway intends to solicit stockholder proxies in an attempt to remove several directors, including CEO Alison May, from the board at the next annual stockholders' meeting. Galloway said the CEO's "poor management skills" had created "insecurity and uncertainty surrounding the company that continues to crush shareholder value." Galloway said he remains concerned by disappointing financial, operational and stock-price performance; he and his affiliates collectively hold 1,396,790 shares (15.5%).
|
