On the heels of what Dr. Jeff wrote................
Is the management at OO a bunch of friggin' idiots or what? This is such a gamble I don't know how it makes sense. Here you have a premier
sunglass company, and you go into sneakers.
1. This HAS to be drag on OO. Earnings wise, debt wise, credability wise, etc. How many years do you think it will take for the shoes to be profitable? Maybe Never.
2. This has to be some of the worst timing I have ever seen. It would be one thing if OO was tearing things up. But after a year of getting hammered, when they finally look like they might see some good earnings, they do this.
3. You couldn't pick a more competative market (except maybe the "tech" market) to go into. Or one that costs more money to go into. And OO has no experience with shoes or apparel. If they stayed with optics, what their name is known for, it would have made sense. Things like the Once Xcel purchase, etc.
This is a completely non-Technical opinion, buy I think OO is as good as dead (stock price wise). And may become dead if this thing flops.
Just a real bad decision, probably a Jannard ego play.
Now having said that, here is the bright side. Call these "Wild Cards."
1. Oakley has been successful at everything they have attempted so far. This company actually started out making handle grips for bikes and motorcycles. Then accessories, then goggles, etc. The question, is this their "Waterloo."
2. Oakley does already have a decent stable of endorsers on their payroll. But how many will be ABLE to endorse non-sunglass products. And they will definitely need more marquee names to compete.
3. Everthing OO does has a plan behind it, even if it is not evident to us. If they didn't want people to know about this shoe thing yet, they could have kept it under wraps. You can produce prototypes with no logos you know.
4. So Cal is the place to be if you want to produce cool shoes and apparel. Over the last 20 years I have literally seen companies such as OP, Quicksilver, Rusty's, Red Sand, Mossimo, Stussy, etc., go from garage type operations (I mean LITERAL garages) to multi-million dollar companies.
I can't see how this is good short term. I can't see how this is good long term. I seriously think that if they are not careful, this could put them TOTALLY out of business.
Now, the bigger the risk, the bigger the reward. IF OO can pull this off, and they have a knack of beating the odds, they could parlay their name, and become a major apparel power on the level of Nike. And their stock would soar. But this is something that won't happen for years, if ever.
As for OO's wording regard their new "materials" and "technology" for their footwear, well, that is just "Oakley-speak." That is how they turn sunglasses into "Mad Science," and then sell them for $125.00 a pop <g>.
Technically speaking:
Regards stock price. I don't think that it is anything unusual lately. OO has a habit of tanking after a pop, and the markets have been heavily down lately. OO had some short term strength recently, but the break below 12.125 tells me that it is gone. It now needs to look intermediate and to hold 11.00-11.25. If it breaks that, look out 9.00.
BCL |
