Well, friends - after many checks and many inquiries, this is the mysterious stock that dropped 50% in one day - here it comes!
Let's get straight to the point, friends, well - the stock I hinted at in recent days here and in the premium group - is none other than $CPRI!
So, who is $CPRI?!
In fact - CAPRI HOLDINGS is the exclusive owner that holds and operates 3 leading and well-known brands worldwide, none other than:
Jimmy Choo, Michael Kors, and Versace!
So what the hell happened there and how did the stock drop 50% a few days ago! - in one day?!
Well friends - buckle up - and let's check what on earth happened there!
So here's the thing - $CPRI was supposed to merge into another large and interesting luxury company called "Tapestry" symbol - $TPR.
So who is - Tapestry and what the hell happened there?
Well - Tapestry is an American fashion conglomerate very active in the luxury niche. (Remember the last sentence)
As part of its operations, it holds well-known brands - Coach, Kate Spade, and Stuart Weitzman.
The company actually focuses on expanding its market share by expanding its brand portfolio - mainly through acquisitions of additional luxury brands, as well as developing existing brands.
And why am I telling you this?
In fact, this is precisely the problem of one federal judge - who decided in a very biased way - simply to block the merger!
Yes, yes, one federal judge simply decided to block the merger.
The merger would have combined two of the world's leading luxury handbag manufacturers!
According to that judge - the merger would have combined two of the world's leading luxury handbag manufacturers - and this is something they are not willing to accept because this step could harm the end consumer and raise the prices of Michael Kors, Versace, and Jimmy Choo products owned by $CPRI.
"The merger will make the 'affordable luxury' women's handbag market too concentrated."
To the shock of many and in response to the court's decision - the stock crashed 50% on the following trading day (a few days ago - and a few more % afterwards) - the internet is buzzing, investors are furious - and there is great anger within the company - and the company decided not to remain silent.
Do you remember I told you I contacted someone at the company?
Well - I will summarize what I was told: The company does not accept the court's decision, which it deems unjustified - and has equipped itself with the best lawyers in the field and decided to fight back fiercely against the ruling that blocked the merger.
In fact, $CPRI decided that the ruling is fundamentally flawed - and they do not intend to remain silent and move on.
$CPRI intends to appeal the ruling which, in their opinion - "is completely detached from reality."
During our checks, we wondered - what is the source of the anger and could it be "personal"? - We investigated - and discovered an interesting fact...
Could it be that some of the anger from the ruling among company executives stems from the fact that not long ago, company executives increased their holdings in the company's stock at a price of no less than $41 per share?! And for an amount of more than $10,000,000 - from their personal funds.
To clarify - in light of the court's ruling, the stock crashed more than 50% to just $20 - and those executives are at a 50% loss on their money - their personal money...
This is interesting and thought-provoking. (Image attached)
By the way, not only the company disagrees with the court's decision, there are many figures on Wall Street singing the same tune, claiming - the ruling is wrong. (Image attached of a colorful investment manager on Wall Street who claims he does not agree with the ruling at all.)
I am eagerly awaiting the appeal that $CPRI will file with the court, this is one of the most interesting sagas on Wall Street recently - and the appeal that will be filed - if approved - could change everything and turn the tables.
Is the merger possible in your opinion?
Will the appeal be accepted?
I am closely following developments and will update here with all news!
P.S. - $CPRI reports in a few days (7.11) stock price now: $20.