Clearly, earnings are slower this year and there's not a new catalyst, but we still like the company longer-term. |
The company's cash flow has deteriorated. |
The stock ran up since the last earnings call, and the holiday sales were in line with expectations, not great. |
They have been through some tough times before, but this is by far the worst. |
We are definitely concerned about management's ability to execute this upcoming turnaround. |
We don't know what the numbers are for year end, but the cash flow has got to be down significantly, and now they are taking on debt. |
While current Sharper Image management is making progress with expense initiatives, the merchandise turnaround should take longer. In addition there is the possibility of further near-term disruptions with a potential takeover of the company. Therefore we remain on the sidelines. |