Jeremy Raper
Long/short equity, deep value, special situations, growth at reasonable price

Elizabeth Arden: Anatomy Of A Meltdown (And Why I'm Adding To My Short)

Readers of my first article on Elizabeth Arden (NASDAQ:RDEN) will know that I have been bearish on the New York-based beauty company ever since their purported white knight, the Korean company LG Household, walked away from making a bid in mid-June. At the time, I argued that RDEN's premium valuation made little sense given ongoing topline pressure; a structurally-lower margin business due to 65% of the business coming from licensed product; restructuring and balance sheet risk; and the removal of a takeover premium.

While the stock has fallen ~25% since then ($22.3 to $17), looking at the disaster that was the most recent earnings report (along with the insipid management performance on the conference call), I continue to...

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