Aether Holdings (AETH) has been one of the top companies on my "consistently consistent" bad list. If you're from around Virginia, you'll remember AETH as one of the go-go Internet stocks that came public at the top of the Internet bubble in October 1999.
AETH is an Internet bubble classic - from $400 to $5...
Aether was one of the all time great shorts of the Internet age. With $5 million in revenues and $5 million in losses, it sported a market cap of about $10 billion at the height of the bubble. It actually lasted longer than most Internet companies because it managed to do a secondary offering in October of 2000. That left the company with it's most valuable asset - cash. Unfortunately, the company managed to burn through about $600 million in cash over the next two years.
After the Internet thing didn't work out for them, the company transformed itself into a company that invested in mortgage backed securities. In June 2004, the company began investing the $140 million that it had left in real estate securities. Once again, they managed to hit the top of the bubble.
As of this year, Aether Holdings decided to get out of the mortgage backed securities market and focus on Intellectual Property management - whatever that is.
And Tuesday morning, Aether announced they were buying "The Athlete's Foot" chain of stores. Outside of airlines, I couldn't imagine a worse business. Between online competition, razor thin margins, economic cycles and fashion risk, every athletic shoe retailer is guaranteed to go bankrupt several times during its short lifetime.
Aether has been consistently good at doing one thing - creating tax loss carry-forwards. I'm guessing this venture will be no different. Taking my own advice, I'm going to take a hard look at all the retail stocks that I own. Because when Aether's coming in, I want to be getting out.