Dallas, Texas 10/10/2013 (Financialstrend) – Analysts and trade journals are all coming forward with their views on the potential size and shape of Aeropostale Inc (NYSE:ARO) buyout by bigger companies. In the same light is October 7 report from Avondale Partners estimates that Aeropostale could fetch close to $15 per share to its share holders when the buyout company evaluates the future potential of the stock.
At close of business on October 8, the stock was priced at $9.11 per share. This translated to a 64% premium on the Apparel store which would probably prompt investors with a risk appetite to buy into this stock.
Analyst speculation peaked in follow up to unconfirmed news reports on October 2, which indicated that “Sycamore Partners” is mulling a total buy out of the distressed dress store. By the end of September, Sycamore had accumulated close to 8% stake in the stock of Aeropostale.
The trouble with Aeropostale has been with its weak performance at both the browsers and in terms of quarterly results. In 2Q it had reported in lacklustre sales numbers which got compounded due to execution flaws.
At current valuations, the stock has a market value of $702 million with net loss of $21 million. It has total of 78 million outstanding shares. Compared to October 8, close of business valuation, the stock is trading 46% lesser than its 52 week high valuation and is up 17% from its 52 week low pricing.
New York-based teen age cloths chain has tried to stem the rot by revamping its cloths line and offering steep markdowns on its slow moving products. Aeropostale shares have plunged close to 38% since it announced in August that its same store sales have seen a close to 15% dip in 2Q. On the contrary most of its competition has been able to post steady gains over the past two quarters.