Friday, October 12, 2007

Cros (CROX) .................!!! amazing info..

Crocs (CROX), which is
up
217% year-to-date.

What's interesting about this stock is that 38% of CROX shares are sold
short, by investors betting the stock will fall in the weeks and months
ahead.
Instead, the stock continues to power ahead, fueled in part by
the
buying of short-sellers who must meet their brokers' margin calls;
these
folks, basically, are forced to buy CROX to cut their losses short.
But
for every short who covers, it appears that new ones appear out of the
woodwork to sell, because the total short interest on the stock remains
high!

And these folks get frustrated ... and desperate. So they spread
stories
around to try to knock the stock down, one of which is that insiders
are
selling the stock!

And technically, this is true. In the past few months, CEO Ron Snyder
has
sold over 162,000 shares under a prearranged 10b5-1 trading plan. Such
plans allow insiders to set up a program in advance for such
transactions
and proceed with them even if he or she comes into possession of
material
nonpublic information.

So Snyder's selling is not necessarily a bad thing, or a sign of his
lack
of confidence in the company. In fact, as we've long explained to
readers, there are many legitimate reasons for insiders to sell stock
-
most commonly these sales are a way to get paid or a way to build
diversification.

On the other hand, there's only one reason for an insider to buy his
company's stock, and that's a belief that it will be worth more in the
future. So it's interesting to note that over the same period, Snyder
has
acquired (at very low cost) over 157,000 shares of CROX stock!

In short, he's using his CROX stock to get paid ... and a fine paycheck
it
is. But there's no way to conclude from his sales that he believes the
stock will be lower in the future.



Bottom line: Take insider sales with a grain of salt unless you're
certain
you can see the entire picture. And remember that short-sellers will
do
what they can to drive a stock down.

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