SubscribeLetter to Crox Shareholders from the PCEO
June 18, 2007
If I were the CEO and Director of Crocs (CROX) this is the letter I think I would write to all of my shareholders:
Dear Crockers:
I was so happy for all of the directors and shareholders as I have seen so many making millions as the share price of Crocs moved up. Actually, as a group we, the insiders were able to sell $258,892,051 of shares over the last 12 months. On behalf of the following friends I would like to say a big, big thanks you to all of you who have propelled the stock price higher during the past 30 days:
Here is the amount of money these people have realized due to the sale of shares during the past 12 months:
Recently, a total of $66,790,316 has been sold by this group. That really is terrific! Sure, insider-sales have picked up, but it is not because we feel that the stock has topped out. Rather, it is because we feel that we should be prudent and diversify our positions. We all met with a local financial planner and he feels it is best for us to put the monies into a diversified portfolio of mutual funds rather than have all of our money tied up in a single stock. Think about it, even though we will be paying a large tax on the profits, it really does make sense!
Now, let me clear up a few concerns. There are several insiders who have taken down their position in the stock and some who have actually sold the majority of their total position. These decisions were not because the stock is too high or that they were concerned about the company. It was a simple result of dollars and cents. They had mortgages and credit card bills they needed to pay. They felt that since they are in a tax bracket, which will no longer afford them the opportunity to deduct these expenses on their tax returns that they would rather pay them off from the proceeds. Good news! Their debt has been eliminated which really takes a great load off of their shoulders. Once again, thanks!
As for me, I still support the stock. I see no reason why it cannot double from here. I am feeling generous and want to give back to those who have helped me….With all of the supporters and bulls looking for shares to go to $150, I want to make sure there are plenty of shares available for those who have not yet been able to capitalize. So selling a large portion of my shares is merely an altruistic move to allow these that do not have shares the ability to now have access at these inflated prices. Why should I be so greedy? Since I have sold about 600,000 shares and now have a smaller position (234,243 shares held directly) I fell much better that I have allowed others to enter the “Crox Club”. Now there are 600,000 more shares available for others to buy. I really feel good about this.
So, once again, thank you for the support. My family and I really appreciate it and even though the directors that sold have a much smaller position in the company, we will do our best to continually help create shareholder value. (this includes those directors that sold all of their direct positions)
Yours truly,
Andrew “Crox” Horowitz, Wannabee-PCEO (Pretend CEO)
_______________________________________________________
Follow Up from Post regarding Croc’s Shares overvalued and Croxcast Podcast
Poll Question: Is Crocs Correctly Valued?
(Disclosures: VERY SHORT)
The Rental Car Gas Game
June 17, 2007
There I was, once again moving towards the counter, anxious that I was going to get beat by those smart people who silently laugh at me as I ask seemingly stupid questions. It is clear that they know what I am going to ask even before I ask. I am convinced that they know just how to answer me in order to confuse me even more.
I am talking about the highly trained and very sly counter clerks of the “evil” Rental Car Companies. Let me ask this: is there some specific reason that the various rental car companies try to confuse and confound the end user? (aka. ME) Don’t try to pretend because this had happened to you too.. I am just brave enough to admit it!Here is how the game is played: First, when you rent car there is the process of filling out all of the paperwork that requires an endless number of initials and 
signatures. This is how they first get you off your guard. Then they look to get you to buy add-ons that, at first, seem innocent enough.Somehow they are not interested in explaining that most major credit cards will cover you if you them to pay for the car. It is also not in their interest to explain that there is the potential for coverage with you current car insurance policy. (Of course the extent of the coverage for both of these points will depend on your card and insurance policy)
None the less, it is very clear that rental companies earn a terrific margin on the insurance coverage. Here is a little know secret… I have a friend that was in the business for many years. She told me that part of the basic training the rental car companies provide to all new sales people is the “positive head shake”. It goes like this: When the agent explains the insurance option, they will shake their head up and down continually to try to have the renter mimic the “YES” gesture. It seems that there are some physiological studies that have shown that a yes or no shake will influence another person to do the same thing.
Trivial…sure, but they really want you to buy those extras! That is the smallest of issues though. What really gets me is what I call the “Rental Car Gas Game.” This is the game that Read more
Adobe earnings seen benefiting from CS3
June 14, 2007
There are several calls coming from the street today concerning Adobe. Shares have been flat for some time and now that the release of the much anticipated Creative Suite 3 (CS3) has been met with such success, there may be an opportunity to celebrate. The product line up that Adobe has brought to the take is rather impressive. From the smooth running and very popular Photoshop to the now Mac friendly Premiere Pro, the line has a very impressive depth for graphics artist, web designers and for professional audio.video companies.
Of note are 3 calls; Amtech, Kaufman and Cowen. Each believe that there should be some upside after hours and as there product launch of CS3 has been received well by consumers. Amtech see shares moving higher in post-market Thursday but states that management will need to guide higher into the future to maintain momentum.
We have been holders of this stock for some time and feel that there is a bright future considering the integration of the Macromedia merger has been very successful. Adobe has been providing a favorable move each summer and though September. It is actually uncanny how there has been a rather predictable cycle each summer. There is no reason why this time should be any different. The Web needs the products this company provides and with everyone onto the Web 2.0 kick, Adobe provides the software for the do-it-at-home-producers.
We continue to find value in these shares. Unless there is a substantial surprise, Adobe should be a stock to watch over the next several months.
The chart shows an interesting pricing pattern for Adobe starting in June. They clearly show a cycle that is beneficial during the summer an into the fourth quarter.
Horowitz & Company Clients are LONG Adobe as of this post.
NAND shortage and iPhone effect
June 14, 2007
According to recent reports from Apple Insider; “An existing $1.25 billion dollar arrangement between Apple and the world’s largest memory makers was designed to secure the iPod maker an ample supply of NANDflash memory through 2010, but Apple is now reported to be asking for even more chips ahead of iPhone.
Taiwan-based DigiTimes, which wavers in accuracy but has recently nailed a scoop or two, is reporting that Apple has been in talks with Samsung for the purchase of a volume of NAND flash to be used in all iPods and iPhones from June to year-end. The report cites “sources” in saying Apple is asking for 400 - 500 million 4Gbit NAND flash equivalent chips, which is approximately 10 to 15 percent more than the two firms had agreed upon earlier.”
There are several firms that make the NAND memory and if the iPhone is successful, there could actually be a shortage of inventory. This is good for several firms as there has been a glut of memory available and prices have been declining for several years and look to do so for some time to come. Unless the capacity reaches a level where it will be usable as a replacement for disk drives. In other words, solid state desktop and laptops which will no longer use rotating drives for storage.
In a report today, ARS Tecnica writes that “Despite the dramatic cutback in growth projections, demand for products that rely on these devices remains strong. The SIA expects to see growth across the various product markets that it monitors.”
There are several benefactors of this possibility, but the most obvious seems to be Samsung, Micron Technology (MU) and SanDisk (SNDK). The shares have been trading all over the map during the past year as there has been a margin compression and sales have softened. But lately, it seems that this has been turning around and the shares have been moving higher.
Even with prices falling (Moores Law effect) there may be such a strong demand that these companies will benefit as there is a seachange occuring in the area of memory.
Note: Horowitz & Company Clients are LONG SNDK
TDI Podcast 14: CROXcast, eBay and CNBC
June 13, 2007
The CROXcast. Crocs and eBay Short Idea Discussed. CNBC Challenge Cheaters. Listener questions answered.
It has been a long weekend of comments on the blog site for The Disciplined Investor. My analysis and comments on CROX seemed to have hit a nerve. In this Podcast, we discuss many of the comments and dig into the phenomena.
Clips from thestreet.com Cramer lovs Crox, ihatecrocs.com, wallstrip.com and technical traders, utube videos on Crocs and Dorcs are heard here too!
Read recent SEC documents on Insider Trades…Get a calculator and add up the shares sold by the Director of the Board:
CLICK TO SEE MASSIVE SALES BY DIRECTOR OF BOARD
Look at Previous Sales Activity…(see chart below) Read more
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