Is it time to scoop up the bargain of a lifetime?
Is SurfStitch the world’s slowest moving train wreck? Or is it one of those companies that is destined, as it busily rebuilds, fortifies, to eventually become one of the great online retailers, the king of surf etc?
As revealed an hour ago, SurfStitch has dumped its North American operations and will move its US online store SWELL to Australia. The company’s share price, which peaked at two bucks eighteen months ago, is now skidding at ten cents apiece.
Think about it. If you’d invested a hundred grand in December 2015 it’s now worth five gees.
From The Australian.
“The online action sports retailer now expects an underlying loss before interest, tax, depreciation and amortisation of $10.5 million to $11.5m versus $5m to $6.5m previously advised.
“While the company (SRF) says it has made “substantial progress” with its plans to cut costs, streamline operations and transfer its core SurfStitch.com website to a new platform in the second half of 2017, the expected loss has deepened because of a “very difficult” general business environment for apparel and footwear in its key markets, particularly the UK, where its Surfdome business has experienced “very intense margin and sales pressure.”
“…attempts to restructure the North American business have failed.
The company will transfer its SWELL eCommerce platform to Australia and wind down its North American infrastructure by January 2018.”
SurfStitch’s CEO Mike Sonand added an optimistic addendum to the statement. “Work to transform our business model … is going well.”
Do you think ten cents a share is a fair price for a biz that once hurtled beyond a half-billion dollar valuation, but is valued now at only twenty seven mill and is the target of a “looming $100 millions class action from aggrieved shareholders”?
An interesting image to study is below, a table of director transactions. See the red? That’s the company founders Justin Cameron and Lex Pedersen offloading seven million shares each, both scooping up thirteen million dollars on a share price of $1.78. It was a canny sell, just off the back of the company’s $1.99 peak.