I have to start off by saying that I do own a pair of crocs. I don’t wear them very often out in the city but when out on vacation I sport those bad boys out. Yes, they are very comfortable and oh boy are they some ugly-looking shoes. But hey, I will give up fashion over comfort on any vacation day. Sorry ladies!

I have a very vivid memory of the held offer I saw when CROX finally reported some bad numbers. I remember ARCA at 57.50 sold about 10 million shares after hours. I mean seriously, the stock gapped down from the 74s down to high 50s and the ARCA seller would not lift the offer to save his life. Boy was this guy right!

Here we are 9 months later, 53 points lower or about 92% down y/y. That is big rip. So now the question is, are they going under? I don’t really know. But I do know that down at these prices I have a lot on my favor:

1. Theres only $4 more bucks of upside for the shorts and multiples of that of downside. Should ANY and I mean ANY good news come out, it will be fun watching some of those 32M shares covering (42% of the float).

2. At these prices the path of least resistance is to go back up. For the reasons mentioned in 1, any dip will be met with natural buying from the shorts covering.

3. There is a good chance of a company such as Nike to buy them out.

4. Technically the stock is trading down at the lower level of the downtrend channel (see chart below)

5. It seems to me that it is just a poorly managed company. They are finally trying to expand beyond their shoe line but who knows if that’s enough. I will let the private equity guys decide if they can do a better job.

I do have to say that if Nike buys them out I will look forward to some comfortable footwear. Maybe they will be able to come up with a more comfortable version of the Cole Haan Air dress shoes. Until then I will continue to wear my reefs around the office.