From Herb Greenberg at thestreet.com
Liquidation rights: Couldn't help but notice the sale of shares in American Eagle Outfitters (AEOS:Nasdaq) by the controlling Schottenstein family of Ohio, which just happened to show up the same day American Eagle, a favorite of teens, disclosed that it'll be the official clothing supplier for the Dawson's Creek TV show.
Remember, these are the same Schottensteins whose family made their money in the liquidation biz. Nobody knows better than they do about buying low and selling high! (American Eagle's stock, in the past year, has more than doubled; it's up eight-fold in the past two years.)
A wholesale liquidation? CFO Laura Weil says no. She says the Schottensteins have cut their stake from 60% to nearly 40% but intend to maintain control of the company. "That really is the truth," she told my assistant, Mark Martinez. "They own over 20 million shares; they are not planning to sell more than where they are today."
Still, why have they sold so much? Weil says the Schottensteins were advised they didn't have to own 60% of American Eagle to maintain control of it, so why own 60% if you don't have to? (Try telling that to the shorts, who believe that in addition to knowing about liquidations, the Schottensteins know a thing or two about the fickle nature of teenagers when it comes to fashion.)
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