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October brings ill wind for high flying stocks of 2007

Robert Arber
0 Comments| October 22, 2008

Three stocks that were making headlines throughout 2007, Crocs (NASDAQ: CROX, Stock Forum), Lululemon Athletica (NASDAQ: LULU, Stock Forum) and VMWare (NYSE: VMW, Stock Forum), have taken their share of lumps over the past few months as share prices have dropped substantially from post-IPO highs. 

LULU and VMW both began trading in the public markets within four weeks of each other in the summer of 2007, and both opened near $30.00. VMW shot up to around $50.00 in its opening week and then eventually hit the $115 level eleven weeks later in a straight run to the top. LULU (a Canadian company also listed on the TSX, see T.LLL, Stock Forum) had a more modest rise, from $30.00 to $55.00 in thirteen weeks – still nothing to sneeze at. 

And then the tide turned. In October, the British Columbia clothing retailer Lululemon faltered, dipping to roughly $37.00 and popping again to $47.00 before taking a more decisive – and long-lasting – plunge. Shares last traded at $12.66, roughly 55% below the IPO price. 

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Software maker VMW (which just reported Q3 revenue growth 32% higher than last year’s Q3) also headed south in October 2007 as it began a stair-step decline to Tuesday’s close of $18.73, approximately 35% below its IPO price. 

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Shoemaker CROX followed a slightly different path. CROX started trading in February of 2006 at just over $10.00, and shares traded between that level and $15.00 until October of that year before finally making a break to the upside. Prices rose and rose on seemingly unending demand, or reports of unending demand, at least, for the multi-colored resin shoes the company is famous for. Shares flirted with the $75.00 level in – you guessed it – October 2007 before beginning their inexorable slide to the bottom. 

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And “bottom” is not too harsh a word in this case either; CROX shares closed Tuesday at $2.15, down almost 80% from the IPO price and a stunning 97% from highs reached only one year ago this month. 

The true horror of Halloween was best expressed by Stockhouse investor WesternBadger on the T.LLL Bullboard on October 15: “This stock is killing me.” 


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