Slide in Lululemon fires up takeover talk


Shares of Lululemon (LULU) are higher in premarket trading off of a Bloomberg report indicating Adidas (ADDYY) or V.F. Corp (VFC) might be interested in buying the company out.

A 34% YTD decline in Lulu's share price has brought questions on fair valuation back to the forefront.

Though the forward P-E ratio on Lululemon hasn't been lower since 2009, missteps by management and new competition has taken some of the bloom off the rose.

LULU +1.2% premarket

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Comments (2)
  • Stan Ackman
    , contributor
    Comments (1927) | Send Message
     
    As I suspected, LULU will have a short-term rebound after the 17% drop. The premarket action, however, points to perhaps the end of the short-term rebound. The potential takeover rumor has been around for months now. Reasonable people know how unlikely it will be. Market makers are using this old rumor to wind down their rebound bet.

     

    Short-term traders should take advantage of this market action to sell LULU close to $40.
    18 Jun 2014, 09:26 AM Reply Like
  • Greg2333
    , contributor
    Comments (26) | Send Message
     
    Everyone loved lulu in the 70's and now when it's an obvious buy people like you (stan ackman) want to sell it in the 30's.

     

    Short-term traders should identify the high volume capitulation that occurred the day eRnings were announced.
    18 Jun 2014, 01:48 PM Reply Like
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