The Skecher's Riddle (NYSE :SKX)

Here is a riddle, for shareholders of Skechers. The company in this example is not Skechers but it applies to the valuation of Skechers. The first assumption of the riddle is that Company X has $20 a share of intrinsic business value. This number is not in question by anyone it is a fact.

Now lets say in this fictitious company there are only two shareholders you and me. You own 100% of the company but have never been paid. I own 0% of the company but I have the control and I have frequently been paid. I am paid yearly in a salary and have frequently issued options to myself over the years which I have sold to you for a tremendous sum of wealth. You have never received a dime in the company, but you have equity of $20 a share.

You may be paid one day.

How much is each share worth? And who is wealthier you or me?

Skechers Stampedes Down In Shareholder Revolt (NYSE: SKX)

NEW YORK - Shareholders of Skechers revolt as the stock plummets, nearly 20%. The company reported net earnings of $36 million on revenue of $554 million. The company currently has a PE of 5.8 and trades at net tangible assets.

These numbers simply dictate that shareholders are not focusing on the company's fundamentals that analysts seem to think. Analysts are reporting that Skechers is dropping on higher inventory but this is obviously false, the company's stock traded at similar levels for the past ten years despite having much lower profits and revenue. What is slamming Skechers shares, is a good old fashioned shareholder revolt. CEO Robert Greenberg of Skechers controls most of the voting shares. Skechers is a dual class share company, but unlike most dual class companies like Ford, the managerial abuses at Skechers are at an extremely high level. Management has never paid a dividend, and Greenberg made over $12 million last year in stock options alone which he grants himself.

This isn't a quarterly miss, it's a revolt.

Is Skechers Having Iss-shoes? (NYSE: SKX)

Skechers reported earnings of $0.74 for the third quarter. Analysts were expecting $1.02 per share. The company also reported revenues of $554.6 million missing estimates of $572.15 million. The quarter did represent record sales for the company.

COO and CFO David Weinberg said: "Our third quarter net sales of over $550 million represent a new quarterly record and come on the heels of record sales for the first and second quarters. The continued demand for our diverse product offering resulted in growth across our domestic and international wholesale and retail channels."

Skechers was down over 7% in after hours trading.