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Turfscape (42.81)

HOG pump & dump

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March 16, 2010 – Comments (3) | RELATED TICKERS: HOG

Wow...Harley-Davidson is on a tear today! Folks must be excited about the prospects of a stabilizing economy, improving job numbers and rising consumer confidence....oh, wait.....

Nope, just another bogus rumor swirling around about a buyout.

This happens every so often with HOG. Two years ago, the rumor was that Honda was proffering a deal to buy up the iconic bike maker. This time it's Kohlberg Kravis Roberts.

Harley-Davidson has had a difficult few years, and has some work left to do in front of them. But, please, this is a solid, stable company with a decent cash reserve. Folks can talk about declining sales, aging boomers and hyper-sport bikes all they want. HOG is not in a vulnerable position. Quite the opposite. The downturn has forced the company to get lean. CEO Keith Wandell took the reins about a year ago and has made the tough choices to shut down the unprofitable Buell subsidiary, undo the mistake of purchasing MV Agusta, shutter factories and re-organize the York assembly plant. The company reduced its workforce and product complexity. This is a company that is now poised for growth in a 3 year timeframe. There is no advantage to HOG stockholders or to the company to consider a leveraged buyout. Nor do I see value for a private equity firm to buy-up a controlling share of the company.

No, what we are seeing here is a form of pump & dump. Rumor mongering to drive up the stock price for the day. Reprehesible.

3 Comments – Post Your Own

#1) On March 16, 2010 at 8:13 PM, nuf2bdangrus (< 20) wrote:

This has been nothing but a short squeeze since the fed turned on the presses.

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#2) On March 16, 2010 at 10:50 PM, Turfscape (42.81) wrote:

nuf2bdangrus wrote:"This has been nothing but a short squeeze since the fed turned on the presses." Not sure I follow you. Are you stating that the federal government has been propping up HOG to squeeze out the short sellers?  I'm bullish on HOG, long-term. I just hate to see value artificially inflated short-term from some baseless, ludicrous rumor. Inevitably there will be a price fall once the rumor dies out. Somewhere, some unscrupulous ass will scoop up his winnings from this unethical play and dine on truffles and champagne. Meanwhile, some among the average investors will see the spike in price and subsequent drop, panic and jump out of the boat to the detriment of their long-term investing goals.

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#3) On March 17, 2010 at 1:41 PM, Turfscape (42.81) wrote:

Update - vented a little more frustration on this topic HERE today.

Anyone else tired of the unsubstantiated rumor driving market prices?

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