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Two Analysts Have it Out About Lululemon: “Why Does the Stock Look Like it Died?”

in YD News

Lululemon Stock Chart on BNN
THE MATCH“I heart Lulu” Journalist,  Amanda Lang Vs. “It’s just a fad” Venture Capitalist Kevin O’Leary of Canada’s BNN (Business News Network). The two debate the fate of Lululemon stock.

THE ARGUMENTS: (check out the video here, you may need to watch it first–Lulu debate starts around the 10:20 mark)

Here’s basically how it goes…

LANG: “Problem is 80% of products are imported and priced in US dollars”– makes it a bad trade.

O’LEARY: Using 14-year-old daughter as reference, explains Lululemon is a fad just like Crocs. “All of these fad stocks get slaughtered.”

LANG: Lululemon is different! And, in her personal opinion, is unmatched in product quality and likeness in the market. “As a user of the products they’re better than anyone else.”

O’LEARY: Even Gap gets killed eventually. “Why does the stock look like it died?”

LANG: Lulu’s different I said! Well, stock was way overvalued when it was first introduced, and it’s since plummeted, BUT  “at some point there’s value in this name.”

O’LEARY: (Clearly alluding to the fickle nature of females and the ADD of teenagers) “Women, shoes, fleecewear, aerobic wear, crocs, all of this crap, never invest in this stuff.”

LANG: Visibly perturbed. “I don’t think we say ‘crap’ on TV”

THE ANALYSIS: Of course on these shows they argue just for argue’s sake, and granted O’Leary mistakenly calling it a fleecwear company at first, seems like he doesn’t understand what Lululemon actually sells. But does he? Remember that story about kids wearing fitness clothes to school? His daughter probably has like 10 Lululemon jackets. So in his eyes, and on his credit card statement, it’s a fleece company as far as he’s concerned. And Lang throwing in her personal bias? And then getting snippity about saying the word “crap”? Pushing personal preference and getting defensive starts to look a little desperate. 

THE FINAL WORD: Well, regarding their arguments, this could be a draw. However, if we actually had money in the market instead of just talking about it, we might side with the venture capitalist and entrepreneur over the empassioned journalist. O’Leary for the win.


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