Remember Kogan? A couple of years ago the sexiest thing on the stock market, ready to take over amazon and couldn't do a wrong step?
It looks a bit different these days. They had some inventory management issues, the hype disappeared and now down nearly 90% from its peak (2 years ago). The slippery slope seems to continue. To be fair, SP still looks a bit "steep" considering the fundamentals, but hey - what an opportunity to learn from.
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This used to be the big trap for hype lovers and an amazing opportunity for momentum traders. The latter category of ïnvestors clearly must have made a fortune - long all the way up from something like $4 to $25 and short all the way down to now $2.70.
The remaining question is - can the hype be rekindled and does this beast have a second life ... or is it now just another boring retailer waiting for the recession to bite?
I still have it on my watchlist, not so sure yet ...
Mark Minervini in his books has a great discussion about what happens to hyper-growth stocks who go ex-growth. He says that 80% of them will decline by 50%, and 50% of them will decline by 80%. So KGN is a great example. Its also why you should never fall in love with a stock and hold it while it breaks down below the 200 day MA. In Kogan's case that would have signalled an exit around $17.