Parlux Fragrances Undervalued After All (PARL)

Parlux Fragrances (PARL) reported earnings yesterday at around 2:50pm. The company reported diluted EPS of $0.78 vs. the $0.71 expected by Wedbush Morgan. The company also reported 82% sales grow over the previous year, contrary to a downgrade note by Wedbush last week which believed sales would decline.

I called Wedbush out on this call and took heat for it, because after all isn't the job of good analyst to provide insight prior to a market moving event so it's clients can get out before it missed its earnings? Of course it is, but with over 60% of the float short, you have to wonder if the clients were trying to avoid an earnings miss or bank on it?

Apparently the CEO feels the same way. After the close the CEO announced a going private proposal at $29 per share, to eliminate the compliance costs of being a public company and to end disruptions in the company's operations caused by short sellers.

The stock is currently trading at $25.25 in afterhours which is about a 35% premium to the closing price, but is about a 15% discount from the proposed acquisition price.

PARL 1-yr chart:

DISCLOSURE: I maybe long the stocks mentioned above for myself and clients. This is not a recommendation to buy or sell any security.