Tomahawk, WI 09/08/2014 (Basicsmedia) – Michael Kors Holdings Ltd (NYSE:KORS) closed Friday trading session on a low of 4.48% after news emerged that one of the company’s founding investors, Sportswear Holdings, was selling a 5.7% stake in the company. Michael Kors won’t be entitled to receive any proceeds from the sale as it was being carried out as a secondary public offering according to CNBC’s Morgan Brennan.
The sale of the stakes raises further concerns about the company’s future considering it has been registering suppressed profit margins. The sale could also highlight the level at which business is shrinking at Michael Kors Holdings Ltd (NYSE:KORS). CNBC’s Joshua Brown remains bullish on Michael Kors reiterating that there will always be movements both on the upside and the downside on any stock.
“[…] This happened in February the stock dropped to $76 within a month it was back at $100 a share I think it is to be’ expected that not every growth story is like a fairy tale where every single month every single quarter it is good news. There is bad news along the way get used to it,” said Mr. Brown.
The drop in the market raises questions as to whether it would be an appropriate move to buy Coach Inc. (NYSE:COH) stock, which currently trading at the $37 mark with an impressive growth potential according to CNBC’s Jon Najarian.
Pete Najarian, on the other hand, remains bullish on Michael Kors Holdings Ltd (NYSE:KORS) on the fact that no one expected such an amount of shares to be sold causing the sudden downward movement in the market.
“I think when you look at what the market share is for Michael Kors Holdings Ltd (NYSE:KORS) and you can still see where growth is internationally I think this is an opportunity and obviously yesterday none of us knew that this amount of shares was going to be dumped,” said Mr. Najarian.
Judging Michael Kors Holdings Ltd (NYSE:KORS) on a single announcement according to the FMHR traders on CNBC is premature considering no one expected such an announcement over a short period of time. The traders pointed out that had someone bought stakes in the company the stock could also have rallied in the upward direction.