Crocs, Inc. (NASDAQ: CROX, $29.91) is riding high on the plastic-clog craze. The company’s value has increased from $6.9 million to over $900 million in less than two years. But there are signs the fad is fading and competition from big and better companies is increasing. This has not been lost on CROX’s insiders. The company has only been public for three (3) months and insiders have already sold over $120 million worth of stock. But, you know what, Jim Cramer may be right. There’s just not enough stock available to borrow and no shorts with the media clout to humiliate CROX and its investors.
Even the most aggressive hedge fund managers, those that routinely buy up to 5% and 10% of a company’s stock and engage in activism, and those that are willing to allocate 5% and 10% of their total assets under management (“AUM”) in one investment, rarely, if ever, exceed 1% of AUM on a short position and never risk the mandatory retaliation that comes with “going-hostile” against a company they shorted.
“Way Too Aggressive?” Perhaps Cramer’s really thinking: Plastic bullets can’t count.
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